Disruption isn’t new in the auto industry. Brands – and OEMs – rise and fall, new technologies change the game, consumer preferences shift and external factors like interest rates and gas prices can make dealers scramble to adapt to a suddenly changing marketplace.

In recent years, some of the single biggest automotive industry trends revolve around the rise of digital tools that empower both consumers and dealers to know more and engage more effectively – if the right tools are used in the right way.

In this blog, Mastermind explores the digital future of the auto industry and looks at how modern digital tools are:

- Getting consumers into – and out of – the market for a new vehicle at unprecedented speed

- Simplifying the already challenging process of engaging prospects through digital marketing

- Making the dealership customer experience more important than ever before

Pre-Purchase Car Research Condenses Time-in-Market

One of the most important automotive industry trends is the degree to which car shopping online has changed the relationship between dealers and consumers. While purely online car sales have not yet materialized to the degree that many predicted, the breadth and depth of information and capabilities online have armed consumers with more information and insights than ever before.

Today's digital-savvy car buyers are increasingly looking for objective, third-party sites during their car buying  journey. According to a 2019 study by Cox Automotive, third-party sites are the most used of any online resource for car shopping and research, with 80 percent of all car buyers visiting third-party sites during the shopping process.

Additionally, the availability of online tools has shortened the process of buying a car. According to Cox Automotive, the time spent shopping and researching a vehicle purchase continues to go down as consumers get more online tools to automate and accelerate the process. Between 2017 and 2019, the average amount of time consumers spent shopping and researching a new vehicle purchase shortened by more than a half hour, from 13 hours and 48 minutes to 13 hours and 6 minutes. It decreased even more for used vehicle purchases, from 15:07 to 14:12, a decrease of almost an entire hour in just two years. 

Cutting the amount of time that consumers spend shopping and researching contributes to decreasing how long they’re in the market for their purchase, eliminating an average of 22 days from time in market, from 118 days in 2017 to 96 days in 2019.

The Changing Face of Automotive Digital Marketing

This means it’s more important than ever before that car dealership digital marketing is as targeted as possible. And in today’s digital environment, “targeted” means more than simply having the right prospect. It also means having the right offer, delivering that offer at the right time within the constantly shrinking window of opportunity of the consumer being on the market and then connecting in the right format that meets the consumer where they are. 

In digital terms, this means that in order to give their customers the best online digital car buying experience, dealers need to make sure their digital dealership marketing is powered by predictive analytics tools that deliver communications tailored to the devices your customers are using. It’s not just identifying which prospects are on a computer, which use tablets, and which are doing their research on smartphones. Cox Automotive’s research into car sales trends found that more than half of car buyers today do their research on multiple devices. Almost 60 percent use a smartphone to shop for a car, but more than three quarters use a desktop or laptop. While tablets such as iPads are becoming less common as phones become bigger and more powerful, they’re still used in a quarter of digital car sale experiences.

Elevating Dealership Customer Experience

In our digital world, consumers know what they want, they know how they want to be treated – and they’re not shy about sharing with all their friends and connections when a dealer (or any other company) doesn’t meet their expectations. Here at Mastermind, there’s one fundamental common factor we see in dealerships that are thriving in today’s marketplace versus those that are struggling: Their commitment to delivering a great customer experience.

Digital connectivity and capabilities are a double-edged sword for customer experience in the dealership environment. They’ve increased customer expectations for personalized service, but they’ve also given dealers tools like Market EyeQ that provide the necessary capabilities to meet (or exceed) those expectations. 

Consider this: According to PwC, nearly 80 percent of American consumers value speed, convenience, knowledgeable help and friendly service as the most important elements in a positive customer experience. 

Market EyeQ – or any digital tool – can’t make your staff any friendlier. But it certainly can make the process of buying a car faster and more convenient. It can also ensure your sales and F&I teams have all the information and insights they need to provide personalized and knowledgeable service.

Those capabilities extend beyond the sales floor and F&I room to the service drive and other fixed ops opportunities for consumer engagement. Through ongoing engagement and digital analytics, dealers can continually connect with customers to identify new opportunities for revenue while deepening the customer experience relationship and building long-term loyalty.

Are you trying to navigate digital disruption in the auto industry and position your dealership to engage and win in this new environment? Contact us to find out how Mastermind’s combination of auto industry expertise and digital excellence is driving results for dealers of all types and sizes.

Marketers rank high-quality data as the number one factor driving performance success. Have you invested in quality automotive marketing data at your dealership, and in turn, are you taking action based on what the data is telling you about your customers? 

Dealerships are no strangers to metrics or dashboards, but all too often the only figures that leadership and staff use in performance analysis are future auto sales targets and rearward-looking figures, such as conversion rates. 

What if your dashboard didn’t just tell you where you’ve been and where you need to go? What if it helped you understand how to get there and where to start? In this blog, Mastermind helps take your dealership reporting to the next level with insights into:

- How integrating your DMS and sales platform opens new possibilities

- Benchmarking improvements by looking at every stage  of the car sales process

- Comparing your brand and model performance to in-market competitors

• - Ensuring return on your sales platform investment by evaluating each salesperson’s usage and opportunities for growth

• - Leveraging predictive analytics to create a forward-looking view of your dealership’s performance

DMS-Sales Integration Drives Insights

We’ve written before about why data-driven sales platforms are critical tools for auto dealers in today’s marketplace: 

• - They deliver new insights about dealership customers and prospects

• - They help dealers be more proactive in sales and marketing

• - They make the car sales process more efficient

• They improve customer’s dealership experience 

• - They’re a critical tool for growing customer loyalty.

When it comes to dealership performance analysis, auto dealer software like Mastermind’s Market EyeQ provide a wealth of insight into all aspects of how the sales cycle is performing in your dealership. Your dealership is much more than just sales, so for the most comprehensive and useful reporting it’s critical to ensure your sales platform is integrated with your DMS.

Connecting the marketing and sales expertise of your sales platform to mission-critical data factors such as cost accounting, labor cost, inventory, pricing and more ensures your reporting isn’t artificially siloed into “sales and marketing” and “everything else.”

Understanding Your Dealership’s Sales

It’s easy for dealership leaders to get so focused on hitting sales targets that they fail to pay attention to other critical metrics that have a real impact on their bottom line. A comprehensive dealership dashboard ensures some of those metrics are being measured and reported, which encourages teams to work to improve them.

Some examples of these comprehensive sales metrics include per-sale profit and marketing ROI, both of which get to the heart of making your dealership’s operations great not just at selling cars, but at doing so profitably. These metrics also demonstrate the value of integrating your DMS into your sales platform, as your dashboard will need data from both to generate these insights.

It’s also important to generate these kinds of metrics not only for “sales,” but also for loyalty, service conquest and market conquest customers. Among other factors, a reliably profitable and high-ROI service-not-sold conquest operation is critical to running a profitable service drive in today’s automotive marketplace, and insight into those factors helps both sales and service leadership manage their operations accordingly.

Watching the Competition

Motorsports drivers wouldn’t win many races if they didn’t pay attention to where the other drivers on the track were and what they were doing. Just the same, your dealership won’t do very well in a flat sales environment where growth comes at your competitor’s expense if you’re not watching what they’re doing and where they are or aren’t succeeding.

That’s why Mastermind’s reporting tools integrate Market360 reporting, giving you competitive dealership insights into what brands and models are selling in your local auto market. It lets you benchmark against the competition and identify opportunities to capture market share against a weak competitive product or improve your selling against a strong competitor.

Improving Sales Staff Individual Performance

It’s obviously critical to report on and review individual salesperson numbers. Are they hitting their sales targets? Beyond that, powerful reporting tools help you understand why salespeople are or are not hitting their sales targets and where there are opportunities for improvement and growth. Are they great at loyalty relationships but have challenges closing new customers? What’s working for them, and what isn’t?

One key tool Market EyeQ includes in the salesperson evaluation process is a user-by-user analysis of how each of your salespeople is using the data and analysis tools of Market EyeQ, including how well each is tracking to the Behavior Prediction Score®, whether on their own or compared to the rest of your sales team. Are they using the auto dealer solutions you’ve invested in and are they getting the desired results? When combined with reporting tools that break out Market EyeQ-driven sales and profitability, the result is a comprehensive set of insights that make you a more effective manager of your critical sales functions.

Dashboards fueled by data from across your dealership and informed by best practices and predictive analytics can transform your dealership performance analysis from just looking at what has already happened into a forward-looking view of what’s going to happen in the future. 

If you’re interested in seeing what kind of insights Mastermind’s reporting tools can bring to the way you run your dealership and manage your team, contact us for a free demonstration.

The 2010s were a time of incredible change in automotive marketing. Not since the growth of radio advertising in the 1930s or television ads in the 1950s have dealers had both the challenge and opportunity of reinventing the way they engage with potential consumers as they did during the decade where the Internet, social media and data analytics became a ubiquitous part of American life.

Automotive marketers looking forward to 2020 and beyond can benefit from a reminder of how much the landscape has changed in a relatively short period of time.

As consumers increasingly spent their lives online, advertisers followed. In 2010, U.S. advertisers spent $26 billion on online advertisements. By 2019, they spent roughly that much on search advertising alone – in just the first half of the year. By the end of June 2019, combined digital advertising spending in the U.S. had exceeded $57.9 billion and was on track to pass offline ad spending for the first time.

What it meant to be “online” and “offline” evolved, as well. The 2010 U.S. Census found that roughly two-thirds of Americans lived in a home with some form of Internet access, primarily cable or DSL service. The Internet – and online marketing – was something that happened on your computer, as fewer than one in 10 Americans used their mobile phone to access the Internet. 

By 2019, 81 percent of Americans owned a smartphone and the richness of the mobile experience had gotten to the point where more than a third had made their phone or tablet, rather than the computer, their primary method of going online.

Looking forward to 2020 and beyond, what do automotive marketers need to know? What dealership marketing strategies are ready to drive growth, and what auto marketing tools are driving sales and ROI? Mastermind’s best practices for automotive marketers in 2020 include:

• - Recognizing where evolving product mix is driving a change in your prospects.

• - Driving down costs through efficient personalized marketing.

• - Committing to service and other fixed ops marketing to drive revenue in a flat sales environment.

• - Nailing down your most efficient sales through effective loyalty and service-not-sold marketing.

•  

New Auto Models and Consumer Preferences 

The auto industry is grappling with changing consumer preferences, and dealers are being forced to work their existing inventory while trying to predict which future models consumers might be interested in. 

Marketers know that when what you’re selling is changing, whom you’re selling to changes, as well. In 2016, there were 91 CUVs on the marketplace. By 2021, there are expected to be 136 models competing for consumer attention. As consumers continue to opt for larger vehicles in 2020, car market share is forecasted to continue shrinking, while SUVs are expected to grow and pickups to stay relatively steady.

Even with so many new models on the horizon, 2020 car sales are expected to be relatively flat. According to NADA, sales of new-light vehicles are expected to decline by 1.2 percent in the next year, signaling that the competition between dealers is only going to grow fiercer.     

In an environment like this, it’s more important than ever to base marketing decisions on forward-looking predictive analytics – and more dangerous than ever to assume that what’s worked before will continue to work in a new era with new consumers and new products.

Better Personalization Means Better Dealership Profits

Mastermind’s personalized marketing campaigns, powered by industry-best data from partners such as TransUnion, Carfax and IHS Markit, rendered into simple and usable insights led by our proprietary Behavior Prediction Score®, help dealers maintain their competitive edge by ensuring they’re reaching the best possible customer in their market with the right message – at the right time. 

Looking ahead, the timing of dealership’s marketing messages is growing increasingly important. According to Cox Automotive research, the average car shopper is spending significantly less time on the market than ever before: 96 days, which is down 20 days in just two years. And while 96 days is the average length of the car buying journey, a growing cohort of shoppers is even quicker on the trigger, with one in four new car buyers spending 30 days or less on the market.

Identifying the best prospects for your existing offers and product mix and then using data-driven insights to deliver marketing content that has the highest potential to move that specific prospect to take action is how the average dealer marketing spend-per-car-sale with Mastermind is $115, versus $624 for the auto industry as a whole.

Effective personalized advertising is the secret to conquest success in a flat and increasingly competitive marketplace. The results are real: Our dealer partners report the combination of predictive analytics and personalized marketing in Market EyeQ’s Market Conquest feature drives up to 15 new conquest sales a month.

Softening Sales Call For Selling Service

As we discussed a few months ago, auto industry experts generally predict a flat to softening sales market in 2020. In addition to heated competition, this means the risk of marketing oversaturation for consumers is high. Even though the auto industry is slowly decreasing its share of total national digital ad spending, the total amount spent continues to grow steadily. The total automotive online advertising spend has virtually doubled in just four years, skyrocketing from $9.11 billion in 2016 to a predicted $18.15 billion this year.

Personalized dealership marketing can help break through the noise, but the time is certainly now for dealers to look at new revenue opportunities – starting with the service drive.  

Dealership marketers need to embrace the opportunity to get more loyalty customers into the service drive through effective relationship marketing and to attract more new service-not-sold customers through efficient predictive analytics and personalized marketing campaigns.

More service drive customers doesn’t just mean more fixed ops revenues – although it certainly does mean that if managed effectively, which is great for the dealership’s bottom line. But bringing more customers into your dealership means more opportunities for sales, even if it’s not the showroom door through which they’re entering.

Dealership Retention: Keep Your Existing Customers In-House 

If auto industry forecasts are correct, efficiency will be critical to dealership’s profitability in 2020, and there’s no more efficient way to do automotive marketing than to your existing customers. Industry statistics suggest it’s as much as five times cheaper to retain an existing customer than it is to conquest a new one. That means huge impacts on your bottom line. In fact, research from Bain & Company suggests that increasing your dealership customer retention rate by just five percent can increase total profits by anywhere from 25 percent to 95 percent.

Market EyeQ’s predictive analytics capabilities are incredibly powerful when it comes to service conquest, as it’s able to integrate your own dealership DMS data with Mastermind’s arsenal of proprietary and public data to identify the service-not-sold customers who are most ready for a new vehicle, and who are the best prospects for the products and offers you have available.

This combination of analytics and existing service relationship is why Mastermind’s dealers report activating an average 55 percent of their service drive into high-quality new car sales leads, while continuing to show steady service and parts revenue growth.

Finally, by maintaining customer relationships over time, dealers can continue to maximize their sales opportunities even in a flat market. By integrating their CRM with a sales platform such as Market EyeQ, dealers can proactively identify when an existing customer has become a valuable prospect for a lease-end or turn-in deal generating potential revenue from factors such as new and used car sales, lease initiation, upsells and initiation fees. By leveraging this approach, Market EyeQ improves our dealer partner’s retention sales rates by an average of 15 percent over non-Mastermind dealerships.

Does the changing landscape of automotive marketing have you worried that your dealership is falling behind rather than leading the charge into the future? Contact us for a free consultation on how you can use predictive marketing to attract new conquest customers, increase service revenues, keep your loyalty customers in-house and improve your marketing ROI in 2020 and beyond. 

If you’re reading this post, it’s safe to assume you’ve spent time working at an auto dealership and you know how important leadership qualities are to day-to-day business and end-of-year bottom lines. And if you’re in a leadership position at a dealership – or would like to take that challenge on some day – you likely wonder what makes some dealership leaders so effective in their roles while others are ineffective at best…and harmful at worst.

At Mastermind, we spend a lot of time with leaders from dealerships and dealer groups of all types and sizes, allowing us to see some of the best dealership leadership skills in action. In this blog, we’re stepping away from talking about software, data and analytics (mostly!) for a moment and sharing some thoughts from our experiences and the experiences of some of the most famous business leaders of all time, including how to:

- Hire the best employees for your dealership

- Do your job and trust your team to do theirs

- Build a dealership culture that people enjoy being part of

How Your Dealership Can  Avoid the “Bozo Explosion”

As a leader, one of your key responsibilities is to hire great people. It’s a relatively straightforward concept at its core, yet hiring talented people who are also a fit with your culture can pose challenges for leaders, especially when it comes to specialized roles where it often seems there aren’t enough “great” people to go around.

One mistake too many leaders make – especially new managers, who are often uncertain about whether they’re prepared to succeed in their new responsibilities – is failing to identify and find the people who are so good they could do your job, potentially even better than you could.

It’s a truism in business that “A’s hire B’s, and B’s hire C’s” – in other words, managers tend to hire people slightly less impressive than they are, whether out of not being able to appreciate better candidates’ qualities or out of fear that they would open themselves up to competition.

At Apple Inc., CEO Steve Jobs refined this concept, arguing that truly great employees – the “A’s” – would hire people as good or better than they were. But Jobs also warned that B’s would hire C’s, who would in turn hire D’s, leading to what he memorably called the “Bozo Explosion” that would occur in any organization where leadership didn’t maintain an ongoing and rigid focus on recruitment standards.

Nobody wants to lead a “Bozo Explosion.” Make sure you’re not only hiring people who will push you to be even better at your job than ever before, but that they’re doing the same in turn.

The return on hiring people better than you is immense. As legendary advertiser David Ogilvy would tell new managers while building Ogilvy & Mather into one of the first global ad agencies: "If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But, if each of us hires people who are bigger than we are, we shall become a company of giants."

Do Your Job, Not Theirs

Possessing great leadership qualities doesn’t necessarily mean you have to handhold your team. Some of the most famous leaders in American business history agree that one secret to their success was simply not interfering when the great people they hired were doing the jobs they’d been hired to do:

• Berkshire Hathaway chairman and legendary investor Warren Buffett: “This approach seems elementary: if my job were to manage a golf team –  and if Jack Nicklaus or Arnold Palmer were willing to play for me – neither would get a lot of directives from me about how to swing.”

• Auto industry giant Lee Iacocca: "I hire people brighter than me and get out of their way."

• Apple CEO Steve Jobs: “It doesn’t make sense to hire smart people and tell them what to do. We hire smart people so they can tell us what to do.”

In a dealership environment, one of the quickest paths to disaster is to have leaders who don’t let the people they’ve hired do the jobs they were hired to do. It’s a fast track to employee dissatisfaction, poor performance, unhappy customers and missed metrics. Those with great leadership skills understand their role is to make sure the job gets done not by doing it themselves, but by putting the right people in the right roles with the right resources to do their jobs.

Ask yourself: For every metric you’re holding someone responsible for meeting, do they have the skills, resources and authority to do what needs to be done to meet that metric? If they lack any of those three key factors, then the fault is on you as a leader.

Oftentimes, dealership leaders see employee training as a hassle, an expense or a certification requirement that gets in the way of doing business. While it’s certainly an investment of time and resources, part of being a great dealership leader is getting to know and understand your people and their skills, then identifying the places where they could accomplish even more if they had the training necessary for personal and professional growth. Automotive leadership training can yield profitable results. According to Gallup, talented leaders contribute about 48% higher profit to their companies than average managers.

When it comes to resources necessary for doing the job, don’t just think about tools, desks or funding. In today’s dealerships, the most important resource is information. This is why Mastermind’s Market EyeQ is such a powerful automotive marketing tool for dealer leaders, as it spreads that critical resource throughout the dealership to everyone who needs it.

Once you’ve ensured your people have essential training and resources, it’s easier to give them the authority they need to make day-to-day decisions. Great leaders ensure nobody on their team ever has responsibility without the necessary authority, or authority without the attendant responsibility. You can’t make every decision, but the people who are making decisions must be accountable for the results.

Build a Dealership Culture You’d Want to Join

In the same shareholder letter where he talked about hiring skilled people and then getting out of their way, Buffett also noted the importance of building a team of people you like and enjoy spending time with: “We intend to continue our practice of working only with people whom we like and admire. This policy not only maximizes our chances for good results, it also ensures us an extraordinarily good time.  On the other hand, working with people who cause your stomach to churn seems much like marrying for money – probably a bad idea under any circumstances, but absolute madness if you are already rich.”

Today, we call this “culture,” and it’s arguably your most important job as a leader.

We’ve written previously about the importance of culture in dealerships. We focused primarily on customer experience, but no dealership with a terrible employee experience can deliver on a great customer experience. You can tell when you’re at a store or office where the employees are there begrudgingly and are taking their unhappiness out on the customers. Your dealership is no different. It’s very difficult for your employees to dedicate themselves to your customers’ happiness if they don’t feel that same commitment from you in return.

Are you giving your team the training and tools they need to do their job…and do it well? Contact us today to schedule a free demonstration of Market EyeQ and learn more about how it can help you enhance your leadership skills through reporting, accountability, and giving your team the ability to work efficiently.

Today’s car shoppers are deeply concerned about affordability, more informed than ever before about the finance and insurance (F&I) options available, are less willing to spend time dealing with paperwork, expect a personalized sales experience and are willing to walk away from a long-time business relationship if they’re not happy with how they’re treated. When your customers measure their dealership experience, the time they spend on F&I decisions and paperwork can make or break your customer satisfaction index (CSI).

F&I is a critical component of dealership revenues and profits. According to NADA data, the F&I process generates about a quarter of dealerships’ gross profit across new and used vehicle sales. Roughly nine out of every 10 new-vehicle purchases involve F&I, with more than 45 percent including a service contract.

This means there’s more pressure on your dealership’s F&I team to get things right.

Fortunately, there are 3 steps your dealership can take to make F&I more valuable both for your business and your customers. In this blog, Mastermind discusses:

1. - Why F&I matters to your customers

2. - How to make F&I a valuable contributor to customer experience 

3. - The important connection between sales and F&I

1. Why Customers Care About the F&I Experience

We’ve written before about the overall state of F&I in the auto industry, but it bears repeating: Financing has always been a pain point for consumers, but the evolving nature of sticker prices and financing products means affordability now tops auto shoppers’ concerns. 

This is the practical reason customers care about F&I as a component of their car buying experience. The other reason customers care is because it’s their least favorite part of the process of buying a car. The reasons customers dislike dealerships’ F&I experience range from it being cumbersome to the embarrassment of having to discuss personal finances with a stranger to the ever-present fear they’re getting ripped off.

For dealers committed to building a culture driven by customer experience, F&I must be a focal point of the overall customer experience strategy. This includes not only employee training and feedback processes, but also ensuring your team has the right information and tools at hand to make the experience as fast and frictionless as possible.

2. Why the F&I Department Matters  

According to FICO, 46 percent of U.S. consumers ranked “one-stop shopping” as the #1 factor for choosing dealership financing. To meet buyer expectations, dealers need to ensure their F&I process is as efficient and convenient as possible. Failure to do so risks the entire sale. 

For one in six customers in the U.S., just one bad experience is enough to get them to stop doing business with a company they’d previously been happy with. In the dealership environment, this means you can’t even take loyalty customers for granted when it comes to their F&I experience.

Among other factors, that means paying attention to not only what’s being sold, but how your team is selling it. For instance, one traditional sales model that drives many F&I rooms is what’s known as the “300%” rule of selling 100 percent of your products to 100 percent of your customers, 100 percent of the time. That may have worked in a time when the salesperson was the primary – if not only – source of information for the consumer on F&I options, but it’s not an effective model for today’s Internet-first consumer. 

In an era where the federal government has websites warning against credit life insurance products, F&I teams need to take a more personalized approach to which customers are open to being presented with the full suite of potential products and which have come into the dealership knowing what they want and just want to get the paperwork done. 

In conjunction with this, many dealers focus on constantly increasing how much of the F&I process they can accomplish before the customer ever arrives. If your dealership has committed to predictive marketing powered by an automotive sales platform such as Market EyeQ, much of the “homework” has already been done, since the analytic-driven personalized offers that brought the customer in the door are the basis for any F&I discussions.

Market EyeQ’s insights into your prospects and customers – powered by data from IHS Markit, CARFAX, TransUnion and more – give F&I teams a starting point for building an attractive set of offers, products and terms that fit the customer’s individual wants and needs. Market EyeQ’s insights eliminate the need to try to sell everything, allowing the F&I team to focus on selling the most appropriate products and delivering an excellent customer experience.

3. Improving the Relationship  Between Sales & Finance

One major opportunity for improvement in the F&I customer experience is to simplify and refine the handoff between sales and finance. Some dealers are improving the sales and finance relationship by making the showroom salesperson the primary touchpoint for F&I services, but there’s a growing consensus the training requirements alone for the two roles make this an extremely challenging model to do correctly. 

Instead of loading showroom sales teams with additional responsibilities, a more sustainable option of reducing the disconnect for customers between sales and financing is to base both processes on a sales platform like Market EyeQ that ensures everyone is working from the same information and insights about the customer. With these dealership data mining tools in hand, your F&I team can start with the right marketing offer, minimize the paperwork and time involved and improve your customers’ experience in their least favorite part of your dealership.

Are you looking for ways to improve your customers’ F&I experience without sacrificing your dealership’s bottom line? Contact us today for a demonstration of how Market EyeQ can help.

The automotive industry continues to face dynamic challenges such as shifting marketing conditions, increased competition, cost pressure and volatility. For dealers with the right technology, tools, and ambition, it represents an exciting time with a lot of opportunities to differentiate themselves in a very crowded automotive market space. 

Technology is rapidly transforming the automotive industry, and predictive analytics, while now a common industry buzzword, is a core differentiator for dealers who use it well. Predictive analytics is being used to analyze consumer purchase trends and make predictions about future events using techniques like data mining, data modeling, machine learning and artificial intelligence (AI). 

In this blog, Mastermind dives deeper into predictive analytics in the auto industry and what that means for dealers, including:

• - The definition of predictive analytics and why it matters to dealers

• - The increasing importance of predictive analytics in the auto industry

• - How predictive marketing is shaping the future of auto

What is Predictive Analytics and What Can it Do For a Dealership

Predictive analytics uses historical data to forecast future outcomes. This is done through a variety of statistical techniques like data mining, machine learning, and predictive modeling. Predictive analytics helps identify and understand dealer prospects before they even reach out, giving dealers the chance to proactively market to the customer in a highly personalized manner. With this proactive marketing approach, dealers can sell more efficiently because they have the data and knowledge about those customers to allow their sales teams to develop personalized talking points. Dealers can be informed about their customers before the first point of interaction, helping improve the overall dealership customer experience and ultimately building customer loyalty.

Not only will data-driven customer insights allow dealers to understand their existing customer base, but with the right tools, similar behavior prediction algorithms can be applied to conquest customers as well – which is a game changer from the current “spray and pray” methodology used in present day conquest marketing tactics. 

This data is actionable because predictive modeling involves combining what we know about an individual and what we know about the behavior of people who are in similar circumstances. The more we know about the general wants, needs and behavior of the aggregate group, the better we’re able to predict what the individual is likely to do next in their buyer journey and what messaging they’re likely to respond to.

How Dealerships Can Use Predictive Data

Predictive modeling takes the guesswork out of car sales prospecting and marketing by identifying the information that matters about potential customers and analyzing it to determine what’s most likely to change consumer behavior at that particular point in the sales cycle. Those customer insights can then be put into useful context that empowers a dealer’s marketing efforts and sales team to confidently reach out to targeted potential buyers.

For car dealerships, predictive analytics will help the sales team close deals and promote proactive maintenance in the service department. Data analytics can help in optimizing deals against the competition and even provide insights into ways that will help speed up the sales process. Sophisticated data analytics algorithms will find the most profitable opportunities based on critical customer details, analyze it, and then provide deals that prospects are most likely to accept, at the least cost to the dealer. Sales teams can even engineer deals based on the unique needs of an individual customer.

 The Future of Predictive Analytics for Car Dealers

Among other strengths, the auto industry has done a great job in attracting new customers with traditional marketing strategies such as television, radio, and print media. However, these advertising mediums are quickly losing their effectiveness as audience sizes steadily decline. Predictive analytics is perfectly suited to help the auto industry overcome these marketing challenges. By tapping into the power of big data, predictive analytics applications can accurately identify persons most likely to purchase a vehicle in the near future. Complex algorithms consider factors such as time since last purchase, number of repairs on current vehicle, current mileage, and information pulled from social media to identify likely buyers. 

While some dealers are inherently skeptical about any new technology that promises to change their business, predictive modeling is different – and even more important is the datasets that go into them. Sales has always been based on an instinctive form of predictive modeling that salespeople engage in through personal experience: Knowing what you do about the prospect, how do you think they’ll respond to this tactic or that offer? What’s the most likely thing you can do to get them to make a decision?

There’s a key reason why a predictive modeling sales platform is such a powerful tool for auto dealers: Rather than metaphorically tearing out the showroom floor and starting from scratch, predictive modeling is the next evolutionary stage of sales best practices that dealers have been developing for more than a century. It removes inefficiencies and automates costly and wasteful processes. Rather than replacing salespeople, it empowers them, giving them not just more information, but better information, along with suggestions on how to use it most effectively as part of their sales process to sell more cars every month.

Auto dealerships should have a predictive analytics platform in place that is focused on harnessing data and gaining insights for your sales team to help your dealership sell more cars.  Market EyeQ by Mastermind is the first sales platform that gives your dealership the power to target and communicate with every potential buyer in your market from one tool. With the right technology and resources, your dealership can thrive this holiday season and beyond. If you need help, contact us to set up a Market EyeQ demo. 

Direct mail, email, digital, mobile… what’s a dealer to do? The rise of dealership internet marketing has created a changing environment in which many dealers wonder what the “best” marketing method is for them to engage with prospects. 

In reality, there isn’t one marketing channel that’s better than all the others in all circumstances and for all prospects. The answer to dealers’ questions is not in picking a favorite marketing tactic and doubling down on it. Rather, the most important aspect of an effective dealership marketing strategy is to have a personalized omni-channel marketing strategy in place at the right time to deliver the right message to the right prospect – whatever those might be.

In this column, Mastermind shares dealership marketing best practices and tips for finding the right marketing channels, including: 

• - It all starts with predictive marketing capabilities

• - The importance of a multichannel marketing strategy

• - How to enrich your customer’s experience via personalized marketing

How to Use Predictive Analytics to Create a Multichannel, Consumer-Based Marketing Strategy

While the rise of new marketing channels such as email and digital tend to grab the most attention when dealers look at the changing marketing landscape, the real revolution has happened behind the scenes. That’s where the data and analytics revolution took place that changed what dealers know about consumers and how they can identify the best prospects in ways they never could before.

This is why Mastermind developed Market EyeQ’s predictive marketing capabilities, connecting automotive data and predictive customer analytics directly to personalized marketing campaigns. Market EyeQ’s direct mail campaigns contain actionable offers personalized for each consumer’s situation, but pre-approved from the dealership.

Best of all, predictive marketing means not having to sacrifice lead quality to keep costs down. The process of automated lead identification of the most qualified car buying prospects  for your dealership means that you’re only spending to market to the highest quality leads in your market. That’s why Mastermind’s dealers report a marketing cost-per-sale of just $128, compared to the $632 industry average.

Finding the Right Marketing Channels for Every Prospect

Different people care about different things – and prefer different ways of communicating. Market EyeQ is designed to engage with potential car buyers in the most effective manner possible, matching its customer insights about each prospect to the most appropriate mix of more than 100,000 campaign variations.

Those connections can change based on where the customer is in the car-buying process. Some touch points might work better in the form of a letter, others in email, others through a slickly designed – yet personalized – brochure or other collateral. Each connection is made at the appropriate time in the customer’s journey with the most appropriate messaging to maximize the potential of the prospect showing up on the showroom floor for your sales team to close the deal.

Part of choosing the right channel at the right time is knowing what works and when, especially when it comes to direct mail vs. email. Direct mail’s response rates are still solid, averaging 4.4% in a recent Direct Marketing Association study compared to email’s 0.12%. For many consumers, there’s still value to receiving something in the mail that digital channels can’t replace. This is why more than 40% of people still at least scan every piece of mail they receive.

However, that’s not to say that digital tools like email don’t matter. The low cost of sending each message means that while email’s response rate is much lower, its ROI is significantly higher – averaging $28.50 versus $7 for direct mail. But at the volumes at which dealers are working, it can be challenging to drive sufficient response with email to reach those industry-wide ROI figures. To put that into perspective, a 0.12% response rate means emailing more than 80,000 prospects to average one response.

As a result, Market EyeQ’s analytics-driven campaign personalization often begins with direct mail’s much higher response rates and then moves to the immediacy – and low cost – of email once the original connection has been made and the prospect is much more likely to engage with the dealership’s messages. It’s this mix of traditional and digital marketing tools, driven by personalized insights into each prospect, that makes predictive marketing a powerful tool for automotive dealerships.

The Importance of Customer Relationship in Marketing

The first interaction a customer has with your dealership might be with your marketing messaging. Regardless of what marketing channel that connection is made through, it will set a precedent for their overall customer experience with you. 

This is one of the many benefits of predictive marketing, as dealerships that pride themselves on personalized service can set that tone at the very first touch by communicating with an offer relevant to them, through a channel and in a manner that demonstrates your understanding of the customer and their unique needs.

The evidence is clear that today’s customers value – and increasingly expect – a personalized dealership customer experience. They reward dealers who provide that experience with profitable loyalty and punish those who don’t by purchasing from a competitor who will give them what they want. When you’re developing your dealership’s marketing strategy, are you starting off your relationship with potential customers in a way that grows that personalized experience, or are you putting yourself at a disadvantage from the start? 

If your dealership’s marketing strategy is focused too much on identifying the best marketing channel and not enough on understanding what your prospects want and need from you, it’s time for a change. Contact us for a free consultation on how to make all your channels more efficient and effective through predictive marketing.

When it comes to automobile marketing and sales, there is certainly not a “one-size-fits-all” approach. Car shoppers are unique in their budgets and vehicle needs. It’s important that dealers understand the uniqueness of each car buying prospect and are equipped with offer details to effectively meet your prospects’ demands and move your unsold car inventory.

Dealerships that take a data-driven approach to prospecting have the best chance of intelligently targeting qualified leads, as well as creating attractive offers that will engage prospective buyers and retain previous buyers. In this blog, Mastermind shares four automotive data types to help your dealership sell more cars such as:

1. Demographic and behavioral data to personalize your offering

2. Cost of ownership data for transparency and rapport building

3. Vehicle history data to maintain a top-notch used car lot

4. Historic customer data to predict future car buying behaviors 

Personalize Auto Marketing with Demographic and Behavioral Data

To maximize your dealership’s ROI on your marketing dollars, knowing your audience and their buying behavior is essential. Referencing automotive market data is always a safer and more reliable approach than making an uneducated guess when defining your audience. Monitoring your social media feeds and engagement is another great place to gain insight on car shopper demographics and behavior. Your dealership can analyze what type of content or offers are most attractive to your social media followers, or which demographics your offers tends to resonate with the most. This insight in turn helps your dealership identify consumer trends to best target your marketing campaigns.

Build Rapport with Cost of Ownership Data

As you know, a car is the second largest purchase a consumer will make. Not just because the base price of a car can be very costly, especially for first-time car buyers, but many additional expenses surface throughout the cost of ownership. Access to data that will better inform vehicle shoppers of what to expect throughout their years of ownership will help you better communicate to your customer what exactly they are getting into. Transparency is the key to customer retention and it helps to build rapport with customers, as well. Additionally, your dealership marketing team can utilize this data to target certain car buyer personas who wish to stay under a certain budget when purchasing a vehicle. 

Better Manage Used Car Inventory with Vehicle History Data

For many dealerships, their used vehicle inventory and fixed ops department is the bread and butter of their business, as the profit margins tend to be way higher than new vehicles. If you are in the business of selling used vehicles, or servicing vehicles (new or used), it’s essential that your dealership can access existing customers’ and prospects’ vehicle history data. Vehicle history reports will help your dealership maintain a high-quality used inventory and will give your prospects peace of mind when purchasing pre-owned. Although providing this data for leads is not free for the dealership, it’s worth offering complimentary vehicle history reports to high-intent shoppers. Carfax is an example of a vehicle history reporting service that, when coupled with a behavior prediction tool, helps your dealership manage leads more efficiently.

Be Forward-Thinking with Historic Customer Data

What better way to predict the future then look to the past? When looking to predict future automotive trends, historic customer data is the best resource to determine your dealership’s business strategy going forward. It can also help decide where to best spend your marketing dollars, as you can get in front of your customers before they decide to potentially look elsewhere. For the most part, you know your lease customers should be spoken to X amount of months out from their lead-end date, but that doesn’t mean you are doing that – a customer data platform such as  Market EyeQ by Mastermind will help you to catch a customer’s attention before they begin shopping around for a new car. It’s not always about price, either - in many cases – customers react just as positively when the offer includes a monthly payment increase.

There’s no need to guess who your audience is or wait for customers to return to your dealership with such a wide variety of automotive data solutions available to you such as Market EyeQ. A data-driven approach is the best way to stay ahead of a flattening market. Ensure your dealership has looked into all of these dataset options to drive as many actionable leads as possible that will ultimately result in more revenue for your business. With the right technology and resources, your dealership can thrive this holiday season and beyond. If you need help, contact us to set up a Market EyeQ demo.

As we approach the end of the year, holiday car sales are upon us, with Black Friday and Christmas being the tentpoles of many dealerships’ end-of-year sales strategies. With so many dealers competing to land price-conscious car buyers , how can your dealership leverage the holidays to finish the year strong?

In this blog, Mastermind shares 3 ways dealerships can maximize their holiday sales and sell more cars:

• - Get a head start on identifying and targeting the best prospects for your holiday sales offers 
• - Use your service drive as a conquest and upsell tool
• - Tweak your holiday sales standard practices for today’s customer

Get a Head Start on Holiday Dealership Deals 

Getting a head start on your holiday dealership marketing is key to staying ahead of the competition. Don’t wait until Black Friday – the right time to begin your holiday auto sales process is as soon as you know what offers will be on the table. That’s when you should turn your analytics tools loose on your potential customer base to identify and rank the prospects who will be most likely to buy the vehicles you’re selling.

It’s an especially powerful time to use Market EyeQ’s automotive equity mining tools and capabilities to identify existing customers who have positive equity in their vehicle and could profitably be traded into a new car during the sale. These deals offer big payoffs for dealers in addition to the new car sale by frequently triggering service, F&I, used car sales and other revenues, especially if the trade-in qualifies for factory certified pre-owned status. Market EyeQ factors in household demographic data from IHS Markit, consumer financial information from TransUnion and vehicle-specific insights from Carfax to highlight the customers who will be most likely to jump at the opportunity to trade in and trade up.

Once you have your prospects identified and ranked by likelihood of purchase during the sale with their individualized Behavior Prediction Score™, the next step is to engage them with effective and personalized marketing communications designed to maximize their likelihood of connecting to your dealership and entering the process of buying a car

This is where the science of data meets the art of automotive sales, and it’s never more important than during a crowded holiday sales season. Predictive dealership marketing is much more than printing someone’s name on the mailer. Rather, it’s an integrated and data-driven process of delivering the right message, in the right format, at the right time, to the right person. 

Once you have the prospect in the showroom, make sure your sales and F&I team are armed with data-driven customer insights, including deal parameters and personalized talk tracks, to help close the deal. 

Service Drive Shines During Holiday Sales

We’ve written more than once about best practices for turning service drive customers into sales prospects, and holiday sales are a great time to lean heavily on vehicle service conquest and relationship marketing to generate prospects and fill the sales pipeline one last time before the year is done.

In the run-up to holiday sales, make a special effort to get customers in the door with vehicle winterization offers and other service specials. Service is a local business with most people getting their vehicle serviced within a 10-mile radius of their home. Consider supporting a hyper-local charity such as a neighborhood senior center or school program in connection to service visits, emphasizing both your community support, as well as your proximity to potential service customers and the convenience your dealership offer as a result.

The run-up to the holidays is a good time to look at the communication structure between your service and sales teams. Do you have people whose responsibility it is to ensure that the handoff between service and sales is seamless from the customer’s perspective? Are your service personnel incentivized to help unearth sales prospects, and does turning a large-ticket service customer into a sales prospect penalize your service department’s numbers, creating a disincentive for them to make that handoff to sales? Dealerships who have those questions answered, using data-driven processes and tools such as Service Conquest feature are the best at converting service customers into new car sales.

Switch Up Your Dealership’s Holiday Sales Tactics 

Your customers don’t want to be stuck at the dealership for hours, working through paperwork while the season’s hot gifts and best deals fly off the shelves at toy stores and other retailers. Today’s popular video games are often available to be downloaded ahead of their launch date to avoid long download queues, you too can invite your prospects to “Pre-Load Black Friday” by handling F&I and other paperwork remotely ahead of time, minimizing the time they will spend in the dealership that day. Make sure you’re doing everything possible to get them in, out and on their way in their new car as quickly as possible, and make sure they know it.

With affordability being such a huge concern for consumers and contract lengths extending further into the future than ever before, it’s a rare customer who can pull off the traditional “red bow in the driveway.” This creates not only challenges but also opportunities for creative dealers to find ways to work with customers who want to surprise their significant other with a new car – but need their signature on the F&I paperwork to make it happen. Big red bow aside, consider the other ways you can help the gift-giver create that special moment they’ve seen in advertisements for years. 

The tightening auto sales market hasn’t made 2019 a year of good cheer for many dealers. But by combining cutting-edge data analytics with sales and marketing best practices (and a bit of creativity), dealers can close more deals and ring in the new year on a high note. If you’re not confident in your dealership’s ability to turn holiday sales into strong sales numbers, contact us to set up a demo.  

U.S. auto industry trends aren’t very positive these days with auto dealers watching forces beyond their control put a damper on dealership sales and profits. But while the global auto sales industry forecast is largely negative, a slate of exciting new vehicles and advances in the ways dealers identify, engage with, sell to, service and retain customers mean it’s not all gloom and doom for auto sales in 2020. In this blog, Mastermind shares insights on: 

- The automotive sales forecast for 2020

- Emerging revenue opportunities for car dealers 

- New vehicles and model updates in 2020 

2020 Auto Sales Forecast 

2019’s auto sales trends haven’t been great, with the industry down by 2.4 percent in July and on trend through September for sales numbers to finish below 17 million in sales for the first time since 2014. Even China saw its first-ever decrease in new-vehicle sales.

The industry has also been hit by the UAW’s strike at General Motors, which has had repercussions at dealerships and throughout the supply chain.

At the international level, the trade war between the U.S. and China has had a broad array of impacts on the auto industry, while many economists and other experts are predicting the global economy could slide into recession in 2020.

Some industry watchers believe that even without major economic shocks such as an expanded trade war, labor unrest or broader recession, there are still a few lean years left for the auto industry, in what IHS Markit has called a “declining plateau.” For instance, Merrill Lynch senior auto analyst John Murphy predicts that the soft auto industry market will continue softening through 2022, bottoming out at 14 million vehicles per year. Meanwhile, Moody’s Investors Service researchers predict a 0.9 percent decline in auto sales in 2020, with the potential for recovery in the following year.

However, there could be some hope for car dealerships on the horizon. During an Automotive Press Association luncheon in October, NADA 2019 Chairman Charlie Gilchrist announced the organization’s support for the United States-Mexico-Canada Agreement (USMCA), calling it a “win” for dealers.
“Congress should pass USMCA to preserve competition in the auto industry and to enable dealers to continue providing affordable vehicles to millions of Americans without interruption—and they should do so expeditiously,” said Gilchrist.

If implemented, the agreement would ensure the continuation of tariff-free exchanges of vehicles and auto parts across North America.

New Revenue Opportunities for Dealers

A McKinsey and Co. analysis of new vehicle sales found that while sales prices have been largely flat in real terms since 1998, the constant stream of new technologies and features has continued to drive per-vehicle profit margins down across the industry. In combination with the average customer loan amount hitting record highs, there are real concerns about affordability being raised industry-wide. Only by searching out and embracing opportunities for efficiency in their operations have automakers and dealers alike been able to maintain their bottom lines.

If dealers aren’t making as much money on new vehicle sales, many will try to make up the difference in fixed ops revenues, including collision repair. This trend is already gaining traction, with parts and service revenues growing from slightly more than $80 billion in 2002 to more than $116 billion in 2018. 

But there may be challenges ahead there, as well: AlixPartners predicts that as self-driving cars and collision avoidance technologies continue to mature, collision repair revenues will fall as there will be fewer collisions to repair. While many of these technologies are a few years off from widespread deployment, AlixPartners’ researchers predict a six percent drop in aftermarket collision repair revenues between 2025 and 2030.

However, the service drive and body shop also offer revenue opportunities beyond just parts and repairs. By treating the service drive as a source of leads, dealers can tap into a well of high-quality conquest customers who will likely be in the market for a new vehicle in the future, which can make a critical difference on a dealership’s bottom line.   

2020 New Car Models  

Auto dealers know that while external economic issues certainly matter, the biggest factor for their business is what’s sitting on the showroom floor. From this perspective, the 2020 future looks bright.

A steady parade of new and updated cars, trucks and SUVs are arriving in showrooms for the 2020 model year. The list of new car models includes a little bit of everything: New and updated flagship SUVs, refreshed high-volume sedans, electrified versions of well-known platforms, high-tech performance vehicles, the return of beloved nameplates and some new competitors are already making their 2020 debuts. Of the dozens of new vehicle models slated for 2020, standouts include the all-new Audi Sport EV, BMW 2 Series Gran Coupe, Land Rover Road Rover and Porsche Taycan Cross Turismo. Of course, there’s still plenty of time for unexpected announcements and surprise debuts. 

With so much change on the horizon for the 2020 auto industry, now is the time to ensure your dealership is prepared to weather whatever comes your way in 2020 and beyond. Do you have the right automotive data solutions in place to ensure that you’re identifying and effectively selling to every possible customer no matter how competitive the marketplace gets? Can you be confident that your customer experience capabilities ensure that you’re retaining every customer you want to keep, while being strategic and effective in conquesting the best prospects from your competitors?

Contact us today and learn how the Market EyeQ sales platform can help your dealership evolve to meet the challenges of tomorrow.