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Jon Lamb

Jon Lamb President

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Who You Don't Target is as Important as Who You Do Target with Advertising

Targeting Customers

The automotive industry has always been one that focuses on volume. Even those who do not consider themselves to be "volume dealers" still perform better when they are increasing the total number of units sold and service customers hitting the racks. We've grown accustomed to the concept of "bigger is better".

In today's competitive automotive advertising and marketing arena, the dealers who are finding the most success are doing so by being smart with their targeting data. The free-for-all days of the past that used bulk-strategies have been replaced by hyper-targeting, improved data, and the type of business intelligence that can only come through careful examination rather than hitting it with a sledge hammer.

Today, dealers need to be selective. You customers are selective. You need to be as well.

What I'm talking about specifically is the trend of blasting out marketing and advertising messages where size matters more than targeting. This is a mistake. You can actually do more damage than good by using the shotgun approach to advertising.

Why You Need to Be Selective

Take, for example, direct mail. The old way of thinking had dealers or their vendors buying cheap lists of names and addresses and sending out as many sales event mailers as possible. It was more cost-effective to hit a larger, unfiltered list than it was to try to parse out the list for smarter targeting. The technology wasn't there to help you differentiate between likely buyers and non-buyers. More importantly, the data wasn't there to guide you through what to target where and when.

Today, we have that data.

An even better example is in email marketing. Thanks to improvements in spam filtering and the ability for people to report emails that shouldn't be targeting them, it's imperative for dealers to be much more selective with the type, format, and frequency of their email marketing. One bad "bulk blast" can be enough to do real damage to your future efforts. In other words, you can get blacklisted much more easily than ever before, essentially eliminating your dealership's ability to take advantage of the wonders of email marketing.

Customer data isn't just about getting more of it. It's about getting better data. It's about taking that data, parsing it out properly, appending it with the most current information, and selecting the targeting appropriately so that the right people are getting the right message at the right time.

Why Your Vendors Aren't Telling You This

Here's a dirty little secret about automotive marketing and advertising vendors and agencies. They usually shoot for the path of least resistence. This isn't universal - there are some honorable and ethical companies out there in this arena - but it's exceptionally wide-spread.

Most vendors, particularly those in direct mail, email, and location-based targeted advertising, utililze techniques to get around the filters and avoid the problems that can come from the shotgun approach... for a while. These techniques are not sustainable. By using these techniques over time, the ROI on the direct mail pieces will diminish, the ability for your emails to get through the filters will disappear, and the location-based targeting will cease to present its data. These "bandaid techniques" will keep the ball rolling for long enough for them to make their money and either move on when the campaigns stop working or continue to bill and make excuses for their lack of success.

If all of this is inevitable, why do they continue down this road? The answer is simple. It's more profitable and most dealers aren't paying enough attention to hold them accountable. The effort, research, and investment necessary to build a sustainable and effective advertising and marketing solution is great, but it's totally worth it for the dealers. As odd as it may sound, vendors who are using the bulk approach rely on dealers staying in the dark.

Turn on the Lights!

It isn't just about vendor profits. There's another more important reason why you should be more selective with your advertising. The pinpoint nature of modern targeting allows you to get the message in front of the right people.

Let's say that you have a great email list of past customers and you want to give them an oil change special to bring them back in and get them used to going to your service department. If you stay in the dark and let an inefficient vendor blast it out to the whole list, you'll likely be targeting quite a few people that are over 50 miles away. It can be hard to get people to drive 10 miles for an oil change, let alone 50. You could be burning your email list due to irrelevance by targeting the wrong people with the wrong message.

Now, let's look at the same scenario but with a tire special that includes a $25 gas card. In that scenario, you'll want to target people further away rather than close by because the message matches their interests and gives you a greater opportunity to get bigger ROs out of the visit.

These are simpe examples but they demonstrate the point. You should not allow your database marketing to stay in the dark. By getting more specific with your targeting and using a combination of the data that's available and the common sense that you already have in order to position your marketing appropriately, you can improve your ROI on campaigns and prevent damage from being done for future initiatives. This is often the difference between sustainable success and eventual failure.

Grant Gooley
Jon, couldn't agree more. Choices are everything. The "spray and pray" approach to marketing is long gone especially when we have all the data and analytics to back up our decisions. If I were a GM I would learn it all (Re; marketing) so that I could make the decisions and not the vendors who might be a tad bit bias..
Alex Lau
John, the article is good, but you need to show us actionable recommendations on how to do what you're suggesting. Shall I list some of them for you?
Amy Hughes
Jon, we see these "Sins of the Father" type mistakes happening everyday. The latest enhancements to industry data and the new found accessibility Tier 3 dealers have to digest it is mind boggling. If you aren't using an approach to laser target your customers, prospects, and even the communities you build on social media, you seem very self absorbed as an advertiser. There is no easier excuse to hit delete or reach for the trash can than the consumer who says, "These people don't get me." Other verticals are honing in on the ideal customer, at the ideal time, all the while delivering the most sought after message to their customer, in the medium they prefer. Companies like Zappos are winning at this strategy and leaving their competition in a fog of confusion. The level of detail that you can uncover in the zip codes around your store (even for used car customers) will open up a floodgate of customers who think, "Finally, someone who is willing to do this my way." Those dealerships who embrace data, internalize it and train their staff on the best ways to use it will not only target customers differently, but customize their sales approaches based on preferences expressed by those customers. We have more data at our fingertips that we can even fathom - but the customer expects us to know them. Historically we have relied on the specific demographic attributes that the OEM and Tier 1 agency assign to a certain make and model. Now we can compare those assumptions at a zip code level. Dealerships who do will find a whole new level of engagement from their own backyard.

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