Automotive CRM

for the
Busy Dealer
 Automotive CRM
for the
Busy Dealer
By Todd Lear Smith
© Copyright 2006, 2007 All Rights Reserved
Lear, LLC

This publication is designed to provide accurate and authoritative information in regard to

the subject matter covered. It has been sold and distributed with the understanding that
neither the author nor the publishers is engaged in rendering legal, accounting, or other
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E-mail todd@learllc.com
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Table of Contents
Introduction ................................................................................................................ 1

What Are You Really Trying To Accomplish By Implementing CRM?............................ 2

Business Requirements Are The Key To Success ...................................................... 4

Use High-Win Projects To Minimize Project Risk

And Maximize Project Momentum .............................................................................. 5

The 10 Beliefs & Attitudes That Kill CRM Projects ...................................................... 6

Summary.................................................................................................................. 10

Who’s Project Should It Be? .................................................................................... 11

What’s Next? ............................................................................................................ 11

A Final Thought ........................................................................................................ 12

INTRODUCTION
Whether you are just starting to look for a CRM for your dealership or you’re already well into evaluating a
CRM provider, the information in this guide will provide some high level insight to help you improve a
process or get your bearing before you begin down the CRM road.

The number one reason 74.3% of automotive CRM initiatives fail is due to flawed approaches to
implementation of the process.

A journey of a thousand mile begins with one step, but if that first step is taken in the wrong direction all
the other steps you take won’t matter in the least. This guide will give you the framework and point you in
the right direction for installing a successful automotive CRM system in your dealership.

The foundation
Let’s start off with a simple story about building a house.

One day, you decide that you want to put an addition on your house. You have two options on how to
begin:

1) You could try to think of what you where going to need to complete your project: Wood, nails, shingles,
concrete and some tools and then just go out in the yard and start building, or

2) You could hire an architect and draw up a plan and use the right equipment, acquire the right amount of
materials necessary to insure a quality job and minimum waste.

Which house would you want to live in? Which do you think ends up to be a waste of your time and
resources and leaks and then crumbles when the first storm hits?

Do you get the point here? Too often I have seen dealerships plunge head first into starting a CRM initia-
tive without taking the necessary steps to ensure its long term success by developing a strategy at every
level of the dealership. And, if you listen to the marketing message of the CRM vendors, you’d think that
all you need to do is buy the software, plug it in, train a couple of folks and you’re good to go. That’s a
naive approach to the CRM implementation process.

The Goal for This Guide

The motivation to write this guide came from the front lines of seeing my dealership as well as hundreds of
others unwittingly start their CRM journey headed down the wrong path and towards ultimate failure. I
wanted to get dealerships and their teams to take a breath, pause and consider their approach to CRM
with a bit more diligence and understanding.

© 2006, 2007 Lear, LLC. All Rights Reserved.

AUTOMOTIVE CRM FOR THE BUSY DEALER | 1
The primary goals for this guide are: ! ACTION POINT
1. To convince you not to jump into buying and implementing It’s never too late
CRM software without using a proven systematic to put a hold on
approach. your project and
2. To give you a high-level orientation on what approach to make sure your
take in implementing a CRM program. Much of what’s in approach is taking
this guide is easy to understand and straightforward. As you towards CRM
you’ve learned, building a house addition once you have success.
the right information is easy too. But, if you’ve never been
shown or have never successfully done a CRM project
before, “you don’t know what you don’t know” and you could make a simple mistake that later would
be obvious. The key is to follow a proven approach for each step of the process. This way, you’ll end
up with a CRM system that comes in on-budget, on-scope and on-time.

WHAT ARE YOU REALLY TRYING TO

ACCOMPLISH BY IMPLEMENTING CRM?
It’s amazing the number of dealerships that dive head first into putting a CRM into the dealership. It usual-
ly means getting your IT guy, BDC manager or “your Internet salesperson” to start looking for software.
Some check with friends in their 20 Group, look for information in trade publications or look for input from
their existing DMS vendor or referrals from dealer friends or associations.

Clarity Is Power
However, CRM is not a “figure it out as you go” kind of sport. That kind of uncertainty makes you easy
prey in a very competitive business. Those selling CRM systems are more than happy to help you get
clear and figure out your Business Systems and Business Requirements. (It’s amusing how their product
will be surprisingly compatible with your needs.)

First, work on being clear on what you’re trying to achieve. Does your dealership have a current
Business System? By that I mean a set process in place that you can put on a flow-chart showing the
step–by-step actions to take to close the sale. It might begin with something like: 1) Answer phone call
from prospect with this script online; and then close with 18) walk customer to their new vehicle and thank
them for the business while handing them their new keys.

You need to define your process and business objectives in writing. Get agreement from all management
involved with the process to confirm you haven’t missed anything. It is urgent to get the process in place
first before shopping for a CRM software system solution. Involve every person who touches the process
for input into deciding the system you will implement.

© 2006, 2007 Lear, LLC. All Rights Reserved.

AUTOMOTIVE CRM FOR THE BUSY DEALER | 2
 Then come up with an overall dealership CRM strategy for
! ACTION POINT
how to achieve each one of your dealership business objec-
tives. You may find that many of your objectives can be Know what your
accomplished without the use of sophisticated software. I Process improve-
truly believe that software is less than 25% of the success of ment benefits are
a CRM initiative at the dealership. and specifically how
you can achieve
Once you know what your Business Systems are, you can go
to work on your business processes. Generally speaking, them before doing
you want to do as much as possible to improve your busi- anything else.
ness processes before automating them with software. Why are you
Putting a CRM product in your store will not fix any problems installing CRM in
with your existing processes. the first place?

Take Charge
You need to set the tone for your demos and negotiations with the CRM vendors. That means going into
the market with a very clear understanding of your dealerships needs. The clearer you are on your busi-
ness processes and requirements going in to a software evaluation, the more likely you are to choose the
right solution. You will need to have your processes completely written out so you can identify opportuni-
ties in the CRM that will yield you high rates of return.

When you signal to the sellers of CRM that you are following your buying process and not their sales
process, you’ll be in a much stronger position when it comes time to get a software demo and negotiate
price. Implementing a new program is tough enough without having to implement a new sales process as
well. Be sure their CRM solution can work with your current sales process.

A Look at Common Dealership Business Systems

Your Dealership Systems can vary greatly, depending on what type of store you have, its size, location,
and organizational staffing. Dealership Business Systems can be high level and then under each item
could be the finer points, or what I call the “micro-process.”

Let’s say there is a goal to increase sales. This is kind of vague and you need to drill down to define
the process and the specific goal. You need to take this goal and look at the possible micro-processes
that could achieve this goal. Here are several potential drill down micro-process segments:

1. Get customer price and payments quotes done faster and more professionally.
2. Compress the sales cycle from 4 hours to 1 hour.
3. Reduce the number of showroom, phone ups that fall through the cracks.
4. Get your marketing message out easier and quicker and to the right people.
5. More and better marketing to generate more and better qualified leads.
6. Capture “Employee interpretation and understanding of existing business processes.”

© 2006, 2007 Lear, LLC. All Rights Reserved.

AUTOMOTIVE CRM FOR THE BUSY DEALER | 3
 7. Embed processes that currently exist in the minds of senior management and employees into sys-
tems that everyone follows.
8. Prepare the dealership for succession by codifying tradition into systems.
9. Improve Customer Service in the service drive.
10. Reduce the number of customer complaints by effectively tracking them and changing policy to
prevent it reoccurrence.
11. Maximized your BDC communication with the floor sales team.
12. Reduce the average number of calls it takes to resolve a customer issue.

Quantify The Benefits

Once you’ve identified your critical Dealership Business Systems, it’s time to quantify the benefits wherever
possible. The quantified list of benefits tells you how much overall improvement you can expect to see.
With this number, you can calculate a reasonable budget that leaves room for an ROI. Notice that these
Systems are in line to the business objectives of the dealership. Nowhere is there any mention of things
like “be able to see a contact’s history”—that’s a feature of software. At this stage, you want a list that is
focused on process benefits.

BUSINESS REQUIREMENTS ARE

!
THE KEY TO SUCCESS
In the last section, I talked about “clarity is power.” Well, ACTION POINT
the Business Requirements document you put together is
the single most important document in your CRM project. Invest the time
It’s also the one dealerships almost never do or are most in putting together
reluctant to do properly. The process of cataloguing your
an effective set
Business Requirements requires a significant investment of
time, but it is time that will have a major payback. Your
of Business
Business Requirements are the cornerstone to your entire Requirements;
CRM endeavor and is directly tied to you achieving a decent it’s worth its
ROI at your dealership. weight in gold.

What Is A Business Requirement?

A Business Requirement is best defined as “what must be in place to make the dealership work well.”
One of the biggest sources of confusion around Business Requirements is “what” vs. “how.” Business
Requirements do not explain how something should be done; a Business Requirements explains what
should be done. Think of it this way: A “what” does not explain or limit “how” something is accomplished.
An example of a “what” is “see a list of non-sold prospects from this month.” This can be accomplished in
any number of ways:

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AUTOMOTIVE CRM FOR THE BUSY DEALER | 4
 • From the CRM system, print the “Non-Sold Prospects” report.
• Keep an updated list of “Non Sold Prospects” on a dedicated whiteboard in the tower.
• Keep an updated spreadsheet of “Non Sold Prospects” on a paper DeskLog.
An important point about Business Requirements is that they can be satisfied by any number of ways.
The “how” will be the job of the Systems Requirement document which you will need to prepare.

USE HIGH-WIN PROJECTS TO MINIMIZE

PROJECT RISK AND MAXIMIZE PROJECT
MOMENTUM
If you talk to most CRM vendors, they’ll represent your CRM
project as one that will neatly unfold according to a logical
! ACTION POINT
series of rational steps. As you’ll see, reality is a bit different!
Implement your
CRM system one
Minimize Risk
High-Win Project at
Certainly, the more you plan and anticipate potential wrinkles, a time to minimize
the more linear and predictable your project will flow. The key risk and maximize
is to set your project up in such a way as to minimize the momentum.
“unknowns” and, thereby, the risks. The reality is that there
will be disruption. There will be unforeseen circumstances
that require you to adjust your plans:

• A major glitch or bug in the software is discovered two months after installing it.
• A customization everyone assumed could easily be done has a complication and is now 90 to 120
days away from being completed.
• There’s unexpected resistance within the dealership that must be addressed.

Bite Size Chunks

There’s the old joke—“how do you eat an elephant? One bite at a time!”

That joke holds true for tackling the implementation of a CRM program. Too many dealerships try to
implement a CRM as an “all or nothing” proposition. This approach can quickly lead to project overload
and failure:

When dealing with projects that span many months, it’s too easy to let timelines slip and end up with
“never ending project” syndrome.

It’s very difficult to develop the depth of detail required to effectively plan and execute. This increased
“unknown factor” adds undue risk to the project.

© 2006, 2007 Lear, LLC. All Rights Reserved.

AUTOMOTIVE CRM FOR THE BUSY DEALER | 5
 By taking an “all or nothing” approach, it precludes being able to learn from each phase to make the next
phase better.

High-Win Projects
The approach I recommend is implementing CRM as a series of High-Win projects. These are projects
that have low-complexity and high-payoff. This approach gives you momentum that increases the likeli-
hood of success for each subsequent project. It’s a good idea to work with your CRM vendor to come up
with an appropriate

• High-Win project to start with, balancing:

• Cost to do the project.
• Amount of time to do the project.
• Complexity of the project.
• Payoff of the project.

THE 10 BELIEFS & ATTITUDES THAT KILL CRM

PROJECTS
Over my years of working with dealerships implementing CRM as well as implementing my own system at
my store, I have come across many mistaken and project killing beliefs and attitudes that were held by
dealers, managers and salespeople. Back when I was selling CRM systems, I always felt constrained
when it came to correcting some of these misconceptions—I didn’t want to do anything to jeopardize a
sale! However, in my new role as impartial consultant, I can now address them squarely. A phrase I use a
lot is “you don’t know what you don’t know.” Well, now you do...

!
1. This is an IT project plan and simple.
ACTION POINT
Go back to the section on what you’re really trying to do. Not
one of your answers were about technology. Every answer was
This is a Dealership
about improving your business operations. Technology is only
Business Project.
part of your CRM project because it’s only going to help you
achieve your dealership goals. And, because technology is only
part of the project, it needs to be put into its proper place: facili-
tating the achievement of business systems. As you travel on your CRM journey, you’ll encounter a lot of
project “noise” at the dealership such as:

• Disagreements over priorities.

• Internal resistance at all levels of your dealership.
• Budget trade-off decisions based on the CRM’s features.
These types of issues can only be dealt with at the dealer and GM level of the dealership.

© 2006, 2007 Lear, LLC. All Rights Reserved.

AUTOMOTIVE CRM FOR THE BUSY DEALER | 6
2. All CRM software is pretty much the same.
This is absolutely NOT the case. There is an unbelievable variety in CRM software, including:

• Database platforms. Some are built on rock-solid enterprise level databases while others are built
on very old, proprietary and flaky databases that could cause you to lose customer records.

!
• Product Specific focus (showroom control, desking, service scheduling, follow up automation,
Internet (ILM), BDC etc.).
• Architecture Design (web-based, server based, etc.).
ACTION POINT
• Capability. For example, you could look at two different
software solutions that both claim to be “fully integrat-
The primary
ed” with your DMS, but actually have two very different
levels of integration. consideration when
selecting software is
Newer Isn’t Always Better how well it satisfies
This is very important: It may be natural for you, or more your Dealership
specifically your IT person, to pick the latest and greatest Requirements.
technology. However, the latest and greatest may not be
mature, stable technology. Have you ever heard of the bleeding edge? Don’t get caught up in the hype of
future technology. The latest and greatest may not have the complete feature set you need. As I said
before, cutting edge is good, bleeding edge is bad.

!
3. We just need a vanilla, “out of the box” system.
The phrase “out of the box” is strictly born of the marketing
department. It was invented to “convince” dealerships that
ACTION POINT
they wouldn’t have to pay for any consulting to make the pro-
gram work at the dealership.
CRM Software
has to be made to
It’s not true. Remember: this is a dealership business project; achieve your
you’re trying to achieve business systems. That means how business systems.
you implement your CRM system is going to be dictated by
dealership business systems. Simply installing software that
“works” out of the box not only does little to nothing to achieve your business systems, it can actually harm
your business if you use it under the false assumption that it’s going to achieve your business systems.

!
4. The software is going to work.
Ever hear of bugs? Ever hear of marketing hype? Ever hear ACTION POINT
that salespeople just lie or really don’t know the product well
enough to inform you? When talking about whether or not Don’t expect software
software works, the question really is—“does the software
to work. Unless you
see it for yourself,
work according to you, the dealer’s expectations?” CRM
be skeptical of
vendors have become very good at marketing. They spend a marketing claims.
great deal of time and money to position their products in the

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AUTOMOTIVE CRM FOR THE BUSY DEALER | 7
 best light possible. They know what the buying motivations of their target market are and how to play to
them. This makes it nearly impossible to validate a software’s claims and more importantly whether or not
a particular software is the right choice for achieving your business systems.

5. We’ll just install it and use it.

This is not like installing a word processor or even an accounting system. CRM systems are notoriously
complex when it comes to installing and configuring. Think of it—a CRM vendor is going to create one
software application that is going to work for hundreds if not thousands of dealerships, each with their
own way of doing things. Much of how one piece of software can serve so many masters is in the ability
to configure and customize it.

Know When To Bring In The Experts

If I gave you a block of marble and the right tools for sculpting and asked you to make me a sculpture of
an eagle you (most likely) wouldn’t know where to start. But, if I gave that same block of marble and
those same tools to a master artisan, he’d make a brilliant sculpture. It’s much the same with CRM sys-
tems. Someone who has the experience of having installed and configured dozens of systems is going to
be able to put it in not only faster but better.

!
6. We’ll change our processes to fit into the system.
Now why would you want to do that? When I ask the ques-
tion, the answer is usually something along the lines of ACTION POINT
“they’re in the business of showroom control and with all of
their customers must know what they’re doing.” What the Don’t look to software
answer usually means is that the dealership either isn’t confi- to fix broken business
dent in their current sales processes or knows their sales
processes. Get your
processes are in desperate need of changing. The answer is
not to simply do it the way the software does. business processes
under control before
In fact, think of CRM as being a bucket of Legos™. What looking at software.
you really want are Lego instructions so you can build effec-
tive dealership processes. If this describes you, then you
shouldn’t even be looking at CRM software until you get a handle on your dealership business processes.
If you can’t accomplish that in-house, then use an outside expert.

7. It’s the CRM Process Consultant’s job to figure out

what we need and make it work.
You can certainly hire a CRM Process Consultant to document your business processes and software
requirements, but be prepared to spend upwards of $20,000 for it and this kind of analysis. Your
Business Requirements document is absolutely critical to the success of your project. It’s a multi-page
document that describes, in detail, what your CRM system needs to be able to do, from a business per-
spective. I strongly recommend that dealerships undertake putting together their own Business

© 2006, 2007 Lear, LLC. All Rights Reserved.

AUTOMOTIVE CRM FOR THE BUSY DEALER | 8
 Requirements and to do so before looking at any software.
This isn’t just to save money, but also because you know
! ACTION POINT
your Business Requirements far better than any outside party.
You absolutely
Ultimately, you are responsible for making sure you have a
complete set of Business Requirements and that you use
must have a good
those Business Requirements throughout your CRM project set of Business
to make sure your CRM Partner is delivering the right thing. Requirements before
shopping for software.
8. We can train our staff ourselves. It’s time consuming,
but well worth it.
Usually dealerships that want to take on responsibility for
doing the training are doing so as a way to keep costs down.
And it’s a perfectly valid cost-reducing step to take. However, almost without exception, I’ve seen in-
house training efforts tank. And it’s almost always because following the decision to do the training in-
house; there was no orchestrated effort to do it properly.

Keys To Successful In-House Training

• If you are going to take on training yourself, then make sure:
• A person with an aptitude for training and technology is put in charge of the training early on.
• A training plan is developed for managers, sale people, BDC reps, administrative support staff, etc.
• A training facility (even a converted conference room) is set-up for hands-on training.
• Your designated Trainer receives adequate training on the CRM system and can field a wide variety
of questions without having to go to the CRM vendor.

Benefits Of A Good Trainer

I would not make the blanket recommendation that you should do training yourself. I have seen some
excellent Trainers who can not only train your users, but also win over anyone who’s resisting the new sys-
tem. A talented Trainer can be a critical agent in your organizational change plans. They can serve as an

!
impartial set of eyes and ears that users will open up to more readily. They can then feed this information
back to management who can take appropriate action.
ACTION POINT
When You Should Do Training Yourself
Doing the training
However, many CRM vendors are strong technically, but are
often weak on training. If this is the case, then you’re almost yourself is fine, but
always better off doing the training yourself provided you take don’t cut corners on
it seriously. the quality of training.

9. My staff has had training so they’re trained.

People should be considered trained only once they can demonstrate a level of skill and proficiency. For
many, this may be after an initial training session. However, some will require more training and support to

© 2006, 2007 Lear, LLC. All Rights Reserved.

AUTOMOTIVE CRM FOR THE BUSY DEALER | 9
 get to a level of proficiency. If you have users who, after initial ! ACTION POINT
training, aren’t demonstrating a minimum level of proficiency,
there are several things that can be done: Users are trained
only when they can
• Separate one-on-one training for individuals with spe-
demonstrate profi-
cific questions, concerns or difficulties.
ciency. Be prepared
• A follow-up group session for users who are having
more general difficulties. to help users become
• “Real world” support where you help users “at their proficient beyond
desk” while they figure out how to use the system. initial training.

Warning Sign
If you notice several people having difficulties getting up to speed with the new CRM system that may be
an indication that your CRM system may be poorly designed. No matter how much training you throw at
people, if the system is a bad one, they will not be able to effectively use it. Your training plan should
anticipate the need for additional training. Don’t let this be an unanticipated surprise. It’s critical that users
feel there is support for them learning the new system.

!
10. My staff will use the system if I tell them to use it.
One of the biggest contributors to CRM failure is rejection by
managers and salespeople. Rejection can take many forms: ACTION POINT
from “bad-mouthing” the system to outright refusal to use it.
Simply assuming your staff will use it is a mistake. In the Give thought early on
case of “user adoption” the best defense is a good offense. to how to proactively
You need to be proactive about your change management plan:
deal with any potential
• Involve all staff users in the design of your dealership resistance to your
system. new CRM system.
• Build a system that work well whether you have a CRM
or not.
• Identify possible problem employees and put a game plan together on how to deal with them.
• Provide users with lots of training on a bug free system.
Are you prepared to handle situations such as a top-producing salesperson refusing to use the system?
Be sure you prepare for situations that can be reasonably predicted. Dealing with any situations that come
up quickly is the key.

SUMMARY
Go into your CRM project understanding that you “don’t know what you don’t know”. By getting up to
speed on the “nature of the beast” you will be well positioned for making realistic plans that are based on
realistic expectations.

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AUTOMOTIVE CRM FOR THE BUSY DEALER | 10
WHO’S PROJECT SHOULD IT BE?
By now, I hope you have a clear appreciation for this being a Business Project whose systems are, in part,
achieved with technology. Business process first, technology second.

Dealership Business Sponsor

Therefore, I strongly recommend that the Dealer Principle have involvement and act as the Business
Sponsor. This role is critical to the overall success of your CRM project. Leadership and continued project
support are the primary function of the Business Sponsor.

Dealership Project Manager

However, I am sure that last thing you want to do is baby-sit a CRM project, so the day-to-day manage-
ment should be delegated to a Project Manager.

Role Of IT
Clearly, technology is a major input to the success of a CRM project and the IT department will have a sig-
nificant role to play. However, their role should not overpower business decisions, including choice of soft-
ware. When evaluating software, the role of IT is to be part of the evaluation, offering an opinion (albeit a
very key opinion), not the final decision. If you don’t have an IT department no problem. Assign two of
your more technology savvy people to look into CRM programs and write an evaluation on each one for

!
review. If you don’t have savvy people look for an outside company to do it for you.

Rest Of Team
ACTION POINT
It’s important that key stakeholders and representatives from
key user groups such as Sales, Service, BDC, and Internet be Keep this project in
part of the project team. Their input will be vital in coming up the hands of business
with Business Requirements and helping decide which soft- leadership. IT is an
ware is best suited to your dealership. important and valued
input into the business
making decisions
but not the deciding
WHAT’S NEXT? factor.

Hopefully by now you know not to rush out and start looking
for software. Here’s a simple quiz that highlights the conditions that should be present before you begin
your evaluation of software solutions

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AUTOMOTIVE CRM FOR THE BUSY DEALER | 11
Take This Simple Test To See If You’re Ready To Evaluate Software
Here is a quick and effective way to determine whether or not you’re ready to begin evaluating software.
For each question, give a score between 1 and 5, with 1 being the lowest and 5 being the highest.

SCORE QUESTIONS

We’ve done as much as we reasonably can to improve our business processes;

we need software to do the rest.

We have a clear understanding of our Business Systems and specifically

what needs to be done to achieve each one.

The Business Sponsor is the Dealer or GM who is willing to put there respective
time and reputation into the project.

Generally speaking, the employees see a clear need for a new CRM system.

We have a project team that includes key stakeholders and representatives

from key parts of the dealership

The project is being organized and lead as a business project (not a technology project)

We have a realistic budget in place that provides room for a reasonable ROI.

TOTAL

Scoring
If any one question scores a 3 or less, take action to raise the score to a 5. If your total score is 28 or
better, then you’re good to go.

A FINAL THOUGHT
Another question related to the failure rate is—“so, if there’s a 74.3% failure rate for dealership CRM projects,
why are more stores than ever jumping into doing these projects?” The answer is simple: because the
rewards are so great that it’s worth the gamble. With customer demands growing at an enormous rate it is
imperative that dealership’s adopt a way to personalize a relationship with each customer. I hope that by
now, you understand that CRM, when approached right, doesn’t have to be risky.

© 2006, 2007 Lear, LLC. All Rights Reserved.

AUTOMOTIVE CRM FOR THE BUSY DEALER | 12
1060 Terrace Blvd, Orlando, FL 32803.
(888)-564-LEAR • Fax:(888)-220-0377
E-mail todd@learllc.com
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