To learn more about this topic, click here to listen to Courtney on the AutoSuccess Podcast, ‘Your Dealership’s Third-Party Data’.
Last fall I purchased a new car. The only communication I’ve had from the dealership since were a few mailers promoting their sales events. Why would I want to go to a sales event when I have a brand-new vehicle sitting in my driveway? Not only are these mailers annoying, but they make me feel like just another name in a database.
Meanwhile, I’ve noticed that a competing dealership in the area is leveraging third-party data to its advantage. I recently received a coupon from them for an oil change. Not coincidentally, it’s almost time for my first oil change in this new vehicle. Which do you think I’ll go to for service? The dealership I purchased from didn’t seem to have the ability to change my status from ‘Sales Prospect’ and move me into its owner retention program (ORP). As a result, I’m seriously considering using this oil change coupon at the other dealership.
The ability to leverage data for marketing efforts is critical for customer retention. In the last few years, we’ve seen an upswing in the use of data for this purpose. Many dealers are effectively leveraging customer data in their dealership management systems (DMS) or CRMs to create targeted, relevant and cost-effective owner retention campaigns. I wish the dealership I purchased from was one of them.
Another application for third-party data is for sales and service conquest marketing. The dealership that sent me the oil change coupon is effectively using third-party data for this purpose. Because fewer dealerships are doing this well, there’s tremendous opportunity to grow your customer base using third-party data in conquest campaigns.
Even if you’re doing everything right with your ORP, there are inevitably a few customers who drop out of your DMS or CRM every day. Attrition is entirely normal and expected, even if it’s a small percentage. The problem is that over time, small percentages add up to large percentages. To replace lost customers, it’s essential to have conquest marketing strategies for both sales and service.
The use of third-party data in conquest marketing provides you with an enormous competitive advantage. Instead of spending a bundle of money to blanket your primary market area (PMA) with generic offers, you can identify and target individuals who are in the market for a vehicle or who have specific service needs. Then, you can send relevant offers to those individuals.
The more data you have, the more responsive your audience will be to your communications. For both sales and service conquest campaigns, it’s important to gather data from as many sources as possible. In general, data can be grouped into three categories.
1) Vehicle Data
Vehicle data is useful in both sales and service conquesting. If you own a Honda or Toyota dealership, you probably want to market to current owners of Ford sedans. Since Ford announced they’re phasing out production of sedans, there’s a lot of conquest opportunity with Ford owners.
On the service side, vehicle data such as age and mileage can be used to predict what type of service the owner might need. For example, vehicles approaching 50,000 miles might need brake pad replacements. Of course, this would also be dependent upon the vehicle’s (and owner’s) location, as vehicles driven in cities need pads replaced sooner than vehicles driven in rural areas.
2) Customer Data
It’s possible to target customers by demographics, life events and credit scores. For example, we know that newlyweds, new parents and parents of high school and college-aged children all make great potential prospects for new or used vehicles.
Additionally, you might want to target prospects by zip code or within a certain income range. There are literally hundreds of demographic data points to filter through and you can get as specific as you like.
3) Shopper Data
Vehicle and customer data become even more useful when they are layered with specific shopper data to target prospects who might be in-market for a vehicle or who are currently getting their vehicles serviced with independent repair facilities (IRFs) or at competing dealerships.
Imagine the intelligence you can gather from transaction data at local service centers, warranty companies, insurance companies, lube and smog centers, tire centers, law enforcement agencies, aftermarket purchases, surveys, tow truck companies and auto parts stores.
These days it’s even possible to determine whether a prospect fits your ideal customer profile by filtering through shopper data from restaurants, department stores, sporting events, or even the kind of wine they like to drink!
Leveraging 3rd Party Data
Having the right kind of data is only the first step in an effective conquest strategy. The next step is knowing what to do with the data. You might have a great list of auto intenders, but unless you know what message to send to them, when to send it and how to send it, that list is not going to deliver optimal results.
For example, let’s say you purchase shopper transaction data for consumers who had an oil change at an IRF. Mailing a postcard with a 15% off oil change coupon to the entire list, then hoping some of the coupons get redeemed is not an effective use of that data.
For one thing, there’s a timing issue. When did the customer last get their oil changed, and how many miles have they driven since then? Is this customer more likely to respond to a 15% off coupon or a $15 off coupon? Is the customer more likely to respond to a mailer, email or click on a Facebook or Instagram post? Or, based on the customer’s location and/or income level, are they unlikely to respond at all?
All these variables, and many more, must be factored into a conquest marketing strategy in order to best leverage the data.
Key to success is the relevancy of your messaging and a digital, omnichannel marketing strategy. While mailers and emails can be effective, adding channels such as social media and display advertising greatly increase reach, frequency and response rates.
Messaging, relevancy, timing and method of delivery are all critical elements in both sales and service conquest campaigns. Successful marketing requires more than just the acquisition of data; you have to know what to do with it.
To view this Guest Blog Post on AutoSuccess, click here.
Marketing | June 09, 2021