Ready for some straight talk about how traditional bricks-and-mortar retailers are faring in the digital realm? The 2016 version of Deloitte’s New Digital Divide report is here, and the results aren’t great. Yet the insights uncovered offer exciting opportunities for dealerships just like yours to turn the tide and dominate online.

Here’s the deal: there’s a growing gap between the digital experiences that brick-and-mortar retailers deliver to customers and the experiences their customers actually desire. As a result, retailors have less influence over the purchase journey even as more people flock online to shop for goods and services. What’s going on? The report points to huge platforms like Amazon and Pinterest that interact with customers every day (sometimes for several hours a day) and so have deep troves of customer data that allow them to tailor content and messaging to each user for a dynamic and exceptional customer experience; an experience which customers come to expect from every digital interaction.

You may be thinking “how can I compete with that?” After all, most dealerships and other retailers have limited interaction with customers – an average of six to eight transactions a year. This limits your understanding of the “moments that matter” in a personalized experience, such as purchase intent and customer preferences. But you can compete and offer the personalized digital experience your customers’ desire. The answer lies in leveraging multiple sources of data from inside and outside your dealership to truly understand your target markets and create a broad range of customized experiences that will help you dominate in the digital world. Here are five ways to do it:

1. Seek an in-depth understanding of your customers

In today’s digital world, personalization is everything. Just look how Amazon customizes what a customer sees based on prior searches, page views, wish-list additions, and purchases. And the personalization payoff is huge – the Deloitte study found that 48% of shoppers and 58% of Millennials are willing to share personal details to acquire better service or perks, or to receive more personalized emails with offers and recommendations. You can take a page from Amazon’s book and learn more about your target consumers thanks to research companies like Experian and Nielsen that closely track consumer behavior and preferences. Whether you work directly with these companies or partner with an automotive data expert, you can access the makeup of car buyers in your target zip codes, drill down to see what interests buyers in a particular vehicle model, and learn what they value in a buying experience.

2. Embrace diverse digital initiatives

It follows that once you have a more personal understanding of your customers, the old “spray and pray” campaign where you put a generic message and out there and hope for the best just won’t cut it anymore. Dealers who recognize that digital initiatives appeal differently across customer segments will have an advantage in today’s digital marketplace. With the right data and analysis you can also determine where your customers are already interacting and transacting, and be there for those “moments that matter” when they’re ready to move forward in a vehicle search. Whether that’s third-party automotive sites or social media platforms, you can capture the customer at a time when digital influence is high and set your dealership up to win a motivated, low-funnel lead. A combination of initiatives is the way to win in today’s marketplace.

3. Move from a campaign mind-set to a customer mind-set

Again, this strategy is all about putting the customer’s desires and preferences first. As the study points out, retailers have been painfully slow at moving from a legacy campaign mind-set (where everything is planned around sales events) to a customer mind-set (where the planning process is built around the needs of different segments of customers, not sales events). This has to change. Companies doing it right understand that it’s all about the customer, not the company. Following the two strategies above will naturally lead you to think more about your customers, but don’t make the mistake of using this information only to better target the message you want to deliver. Instead, use it to uncover your customers’ pain points and address their needs.

4. Allow for self-directed purchase journeys

It’s natural to want to lead customers down a linear path to purchase, but that’s not how most customers shop today. They want to be in control of how and when they engage retailers. This is backed up by the Deloitte study where 66% of respondents wanted a self-directed journey, a steep increase from just 30% two years ago. In practice, this means using digital to allow customers to find their own way instead of following a prescribed path through your inventory and purchase process. A fluid structure where customers can find inspiration at the moment that matters most to them will naturally lead to a better experience and further engagement.

5. Engage in meaningful ways

Not all engagement is created equal. Today’s digitally-savvy consumers’ demand value from every engagement – otherwise it’s just noise to be ignored. The more you can dig into data and uncover your target markets intents and preferences, the more meaningfully you can engage with personalized offers and recommendations. This is the type of valuable content that motivates consumers to take action.

This is an exciting time to re-evaluate your digital strategy so you can be one of the retailers doing it right and winning more market share. Just like Amazon and other big players, let data drive your targeted marketing efforts and capitalize on those digital “moments that matter” to lift leads and sales. When you create a broad range of customized experiences and put personalization first, you can dominate in the digital world.  

Groton, MASS (October 18, 2016) - String Automotive, provider of the auto retail industry’s first and only Dealer Positioning System® (DPS), outperformed their peers significantly in August, selling 16% more midsize sedans than the national average.

The midsized sedan segment has been in freefall, with demand hitting a five-year low in August, according to Automotive News. Across all midsize nameplates, the declines averaged 27%, a loss of more than 60,000 units from August 2015. But String Auto dealers, by comparison, only saw an 11% drop.

“To stay competitive in today’s market, it has become increasingly important for dealers to be data-driven,” said Ken Kolodziej, String Auto’s CEO. “Our DPS platform makes recommendations based on real data that increases effectiveness and profitability. Our clients’ ability to convert more leads than their peers — despite adverse market conditions — is proof of that.”

String Auto’s DPS platform lets dealers compare market share, inventory merchandising, and average customer rating to other stores in their area, measure marketing ROI, and identify selling opportunities by drilling down on heavily cross-shopped models.

“The great thing about our platform is that it not only provides a clear picture of how a dealership is operating through data, but insight into how to act on opportunities,” Kolodziej added. “That’s why our dealers are able to outperform the competition.”

To find out more about String Automotive, or to learn about how its intelligence platform helps dealers turn data into insights, visit www.stringautomotive.com.

About String Auto:

Founded in 2005 and based in Groton, MA, String Automotive delivers transparency, insights and innovation to forward-thinking dealers. String’s dealership intelligence platform, the Dealer Positioning System (or DPS), takes the pulse of each dealership’s local market and guides dealers to make the most profitable, proactive decisions for every store and unique situation. When used in concert with vendors and agency partners, this powerful analytics solution simplifies choices like how to spend marketing dollars, what inventory to stock and where to conquest by letting a dealer’s data drive decisions.

Media Contact: 

Laurie Halter

Charisma! Communications

503-816-2474 

"Who will watch the watchers?" This paraphrasing of a famous line from the ancient Roman poet Juvenal came to mind as I was reading the news about Facebook’s video metrics snafu.  To put it simply, Facebook admitted that it has been miscalculating the average duration of video views on its platform for the last two years(!)  Rather than include all views in its calculation, it excluded any views less than three seconds in length.  That practice left out millions of views and skewed the average viewing time higher by “between 60% and 80%,” according to Facebook.

For any digital advertiser or agency, this sort of error is scary. We rely on reporting from the platforms we use to buy ads to tell us how well those ads performed.  We then make crucial decisions to change our strategies (or not) based on that information.  If the data coming out of these platforms is erroneous or incomplete, our decisions will be based on fallacious assumptions, which leads us to make bad choices and costs us business.

So, what’s at stake?  In the case of a single dealer, it might mean a few thousand dollars to tens of thousands of dollars in advertising. This doesn’t even account for spending money on campaigns that the dealer thinks are working well, but which are instead being over-reported.  Overall, in the case of Facebook’s video advertising business, we’re talking about billions of dollars.

In the case of Facebook’s error, this was only one metric – albeit an important one – that was incorrect.  To me, this is an important lesson for anyone making data-driven marketing and advertising decisions: Like Juvenal’s quote above implies, if we don’t scrutinize our vendors, partners and advertisers, then who will?

My first reaction to Amazon’s recent release of their Vehicles department was, “Wow: The absolute last thing the world needs right now is another automotive research portal.”  Because, really, that’s all that Amazon Vehicles is at the moment: a research portal chock-full of vehicle information, but devoid of any inventory.  As a consumer, my first reaction might be, “This is great info, but where’s my One-Click order button?”

Although I doubt we’ll see drones flying in a 3,000-pound sedan for curbside delivery any time soon, Amazon’s surely taking a methodical approach to eating up a chunk of the very lucrative, and insanely frustrating, auto purchase process. The company will do so by leveraging its core strengths, which, in my opinion, no other retailer or entity, online or brick-and-mortar, can touch.

These strengths include a unique nexus of user base, consumer data, and data mining capabilities, all at an almost unmatched scale.  Companies like Google and Facebook come close, or even surpass it, in areas like user base and overall wealth of personal data, but neither of these companies have the purchase transaction history.  Wal-Mart and Target have data warehouses full of purchase history for millions of consumers, but lack the online omnipotence.

Amazon has 300 million active users and 35 million users who have stored their vehicle information in Amazon Garage, myself included. From a scale perspective, 300 million users is dwarfed by Facebook and Google, but is an order of magnitude larger than the largest consumer portals in automotive. 

As this Motley Fool article points out, Amazon Vehicles could ultimately have a negative impact on TrueCar’s fortunes.  I’d argue that the same could hold true for Cars.com, Autotrader, Edmunds, etc., if, and when, Amazon expands beyond research into its bread-and-butter capabilities of product inventory listings.

For anything transactional or purchase-related, Amazon has everyone beat.  They even have product reviews for millions of products that I, for one, usually find very helpful.  The amount and diversity of purchase information, and the wealth of product information within Amazon, puts the company in a very strong position over the long term.

Sure, you might say, what does ordering a book, some toothpaste and a TV have to do with buying a car? Everything. Amazon has the capabilities to determine patterns in large data sets where a human on his or her own would never be able to see them.  A person can only look at so many data points, but a computer can look at millions or billions and look for meaningful patterns in all of the data. 

Remember also that Amazon is the company that was issued a patent for predictive shipping, which is just a complex way of saying Amazon could ship you items before you order them – or even before you know you need them.

The Vehicles experience may be underwhelming at the moment, but the long-term potential is not in the user interface, or even in the vehicle info because let’s be honest, you can find that information on hundreds of other research sites. Instead, Bezos and company’s competency is making the shopping process as seamless, and as painless, as possible so that shoppers never want to go anywhere else…perhaps even for the second-largest purchase of their lives. 

The operational and advertising aspects of running a car dealership can make it challenging to keep everything together. For dealer groups, it's often more challenging because some decisions must be made in the interest of individual stores while other decisions must be made for the group.

Information is the key. Gathering the right bits of information, bringing them together in a meaningful way, and discerning what the information is telling you in order to yield actionable data can be the difference between success and failure, particularly as it pertains to advertising. This is often very difficult because the tools are usually either focused on individual stores or spread out across the whole group. Breaking it down appropriately is a necessity for savvy dealer groups.

In many ways, groups have advantages. They usually have access to more inventory, larger advertising budgets, and broader name recognition. There are advantages that single rooftops have as well, including mobility in decision making, focused of budgets, and the small business or family-run perception that appeals to many consumers.

Data analysis and business intelligence are the equalizers. For single rooftops, data allows them to be as smart with their budgets as possible, enabling them to go against bigger organizations by letting their advertising work smarter. For groups, having the right information and keeping it consolidated to a single attribution platform allows them to see the big picture while maintaining the granular benefits that single rooftops enjoy.

We've discussed how proper dealership intelligence can help individual stores in the past, so we're going to focus on the groups for now.

Why Dealer Groups Need Business Intelligence

The OEMs and Tier 2 organizations have been using business intelligence for years. They've utilized the value of breaking down information into decision-driving action plans because it allows them to see the effectiveness of individual advertising components while maintaining an understanding of how full-blown campaigns are working as a whole.

This has remained in their realm for a while. Only recently have the tools been available to make it affordable enough for dealer groups to truly embrace. Once does not need the budget of an OEM to enjoy the "secret knowledge" associated with data analysis, Today, even small groups have access and can make better decisions both for the individual stores as well as the company itself.

With the proper merging, parsing, and analysis of the data that's available to us today, dealer groups can see clearly which advertising endeavors are working for each store without relying on anecdotal opinions or generalized decrees. For some stores within a group, one advertising campaign may be driving significant sales increases while it proves to be a waste of money for others in the same group.

Dealership intelligence as we define it solves the macro versus micro dilemma. You can see the effects of different campaigns, advertising venues, demographic targets, and messages across the group while having the ability to break it down in any way you see fit: by brand, by location, by model, or any other way that you can imagine.

We could write a book on this topic, especially when it comes to proper data analysis and dealership intelligence at the group level, but we'll keep this article short and leave you with this: there are no advertising decisions that you make, whether traditional or digital, that cannot be improved through dealership intelligence. In many cases, you're probably making excellent decisions, in which case the dealership intelligence reports will simply act as verification and (in some cases) vindication. In other cases, we're certain that you'll find holes that need to be plugged, budgets that need to be adjusted, targeting that needs to be reworked, or messages that need to be changed when you look closely at the data available.

How many orphaned owners does your dealership have? If you know, then it is a problem and if you don’t know, that is a problem as well.  First, let’s take care of the definition of an “Orphan”: A dealership customer that no longer has a sales associate assigned to him/her and that no one at the dealership is in contact with anymore.

There are dealerships where more than 40% of their customer base has been orphaned. In this day and age, with the overabundance of data available to dealerships, why would a customer ever become “orphaned”?  The hundreds of thousands of dollars dealerships spend each year, and track on a daily basis, including the cost of new customer acquisition through advertising, is staggering. Yet once they have the customer, they let him/her walk out the door, never to return? Why isn’t anyone using their data to hold on to their customers and putting a stop to the orphan process? Better yet, why isn’t anyone using their access to data to get their orphans back?

Utilize your orphaned owners. They already know about your dealerships, they bought from you once, and know how you do business, so access them!  Getting back in touch with your orphans is simple and the cost of reacquisition is small compared to the cost of acquiring a new customer!

How to make the most of your orphans

Here is a simple Action Plan:

1. Every dealership can track their orphans through their DMS/CRM:  Run the report for the past three years.
2. Schedule this task in your Outlook calendar every month
3. Now that you have your orphans identified, schedule four email campaigns:
   • Solicitation for Service with service incentives
   • We Need your Trade-In
   • Monthly Service Specials
   • Where have you been, we miss you…provide service or detail coupons

4. Make sure your email campaigns are embedded with your Google Analytics code so you can track response. Did the orphan click on the link in the email? What did they do when they came to your site? Track the response through Google Analytics to see what campaigns are working or not working for your dealership. 
5. Break your orphans up by zip code and use demographic data (such as that available in String's Dealer Positioning System) to search and see what advertising medium those customers respond to and how to frame your messaging to bring that orphan back in your door.

Dealers often ask us whether they should be using this service or that product to get their message out to the masses about their dealership. Should we increase our PPC budget? Does direct mail still work? Is social media a waste? Is SEO dead? Do people still read newspapers?

In the vast majority of cases, the answer is not about “how” they should be advertising. It’s more about “where” they should advertise in order to achieve the highest return on investment.

They All Work… Somewhere

Despite reports that have been circulating for a decade about the demise of newspaper advertising, our analysis has shown that it can still be effective in certain places. This is probably the starkest example of data trumping intuition and rumors in the world of automotive advertising.

For example, the Boston market is one of the most tech-savvy in the country with a high preference towards digital advertising over traditional. This might be interpreted as a prime location for dealerships to completely abandon newspapers and other forms of traditional advertising, but looking more closely at the data points to an important anomaly.

There are suburbs of Boston with an older, more affluent population that prefers newspapers to digital media. The reach of newspaper ads in those areas is greater than digital advertising, so PPC isn't as likely to bring those shoppers to your showroom.

Just because “gurus” are saying that newspaper is dead doesn’t mean that it’s dead everywhere. Armed with registration and demographic data, you can see which ZIP codes are the best targets for expansion – and whether newspapers should be a part of your attack plan.

Different Message for Different Locations

Another fallacy behind the blanket advertising mentality is that one message or another will work for everyone. Let’s look at pay-per-click advertising as an example.

The message delivered to the local community can highlight the strengths of the dealership in the PPC campaign. “Best Nissan Prices in Omaha” or “Omaha’s Largest Selection of Nissans” could be valid messages to those within close proximity to the dealership.

It doesn’t always work when spreading out further. For example, dealership intelligence tells us that rewording the same message in a different way can compel more and higher quality clicks. If you’re trying to appeal to the market that’s 25 miles or further from Omaha, you would want to test messages that will compel people to make the drive. Examples of this would be “Nissans are Cheaper in Omaha” or “Omaha Has More Nissans”.

Or, if you've identified a wealthier suburb as a target for expansion, it could be that competitive pricing and big inventory doesn't speak to them. Your reputation and the level of service you provide before, during and after the purchase process trumps a couple hundred bucks in savings.

Dealership Intelligence Helps

With so many internal and external reports available to dealers today, it’s easy to dismiss the data as being too much to decipher. It’s not that you can’t do it, but who has the time to sift through dozens of pages of reports in order to find the key data points that may or may not improve your advertising spend?

The concept of business intelligence has helped many companies make smart decisions about their advertising, but our industry has had very little attention paid to it by the vast majority of vendors. As a savvy dealer, you should not dismiss it. Making sense of all of the data is the key to achieving the highest ROI possible with your advertising.

Feel free to reach out to us if you have any questions or to learn how our Dealer Positioning System is bringing dealership intelligence to our industry.

Check your email. There’s probably a report or two that has hit your inbox since yesterday that was filed away in a “to do” folder of some sort. The digital age has given us access to so much data and so many reports from the vendors that help us advertise our dealerships that it can be a full-time job simply deciphering it all.

It isn’t just the time allotted that causes challenges, either. Much of the data we’re given requires concentrated exploration in order to find those hidden gems that can guide a dealership’s marketing path. We know it’s important, but making sense of it all can be too time-consuming.

The good news is that most dealers are in the same boat. They’re all getting too many reports that are too big, too confusing, or both. As easy as it is to file the reports away for “light reading” over the weekend, it’s important to perform regular deep dives into the data in order to make the most educated decisions about your advertising spend.

Knowing this is the first step towards understanding dealership intelligence. Each report and data set can give you a piece of the puzzle, but it’s when you combine the information within the data that the whole picture can come into view.

Looking at the inside data as well as the outside data will get you started down the path to improving the ROI of you advertising dollars.

The Inside Data

If there’s one piece of data that most dealers explore regularly, it’s their website analytics. At the basic level, it can tell you which sources are sending traffic to your website, something that most dealers are seeing. However, it goes much deeper than that when properly set up. For example, Google Analytics has the ability to let you track conversions from each source so that you can get a better idea of how effective each advertising component truly is.

Now, take that a step further. In the world of websites in general and web pages in particular, more is not always better. Many vendors have promoted the concept over the years that the more pages you have, the better your website will perform, but the data says otherwise. There are pages that work and pages that hurt. A proper analysis of website analytics can help you to understand where people are landing, from where they are leaving, and what path they’re taking as they navigate the website. With that information, you can decide whether a page is having challenges that need to be improved or whether the page should be eliminated altogether.

Even within an individual page, there are actions that can be taken based upon information within properly configured website analytics. For example, one button might be getting five times more clicks than another button on the page. This information by itself can help point you down a path, but you have to take it further. How effective are the pages or forms that the buttons presenting? If the button that’s getting fewer clicks is converting at a much higher rate than the other one, it might make the most sense to eliminate the more-clicked button or to have it going somewhere else.

The inside data available to you is not just about analytics. Your CRM reports, PPC information, and inventory merchandising systems all have data that should also be investigated and acted upon when appropriate. By looking at all of the factors influencing your prospective buyers, you can discern not just which advertising venues are working but also how you can improve the way they complement each other.

The Outside Data

For a long time, the best form of outside data came from the manufacturers. This was, in many cases, hard to use because it would tell dealers where they missed in the past without giving them an idea of how to proceed in the future.

Today, there are numerous reports pertaining to buyer intent, web surfing histories, competitive pricing strategies, and demographics that give us more than the ability to see what happened before. It can guide dealers to act based upon a predictive data model.

There are the obvious sources such as Polk, Dataium, and Experian that give us tidbits of information that we can use. The OEM data is getting better. Even insider 3^rd-parties like Cars.com can illuminate the path going forward. The biggest challenge that dealers face in turning this data into a plan of attack is that the reports can be challenging to combine without the right software.

Despite the challenge, it must be done.

The old method of blanketing a market with a message doesn’t work. Different advertising types work well in some zip codes but not in others. Mailers, newspaper ads, email campaigns, PPC – the list of ways to reach people could go on and on and it’s impractical to try to hit everyone with all of them. Dealers need to know what works where in order to better target each individual advertising spend.

What Dealers Can Do

Data is our passion and we help many of them find the right data to guide their marketing decisions, but whether you utilize us or not, you must take advantage of the information at your fingertips. It starts with simplifying the data.

Here are some things that you can do to improve your understanding of the data in order to make the right choices:

• Ask your providers to focus their reports on the information that can drive action. All too often, vendors will position reports in a way that proves their effectiveness rather than seeking improvement. While it’s nice to hear about what’s working, what you really want to know is what’s not working and how it can be fixed.
• Get an outside opinion on just about everything. Your SEO provider, for example, will send you all of their victories, but where are you missing? What keywords are you ranked poorly on that should be a point of focus? There are reports you can order (often for free) and grading tools that can help you to see the areas of opportunity in organic search.
• Look at your reports together rather than one at a time. Individually, reports can point in different directions. When you look at multiple reports in a single sitting, you’re more likely to see the trends that can point your advertising in the right direction.
• Experiment one change at a time. One of the biggest mistakes we see dealers make is to perform wholesale changes on advertising venues, websites, and marketing models. If a page isn’t working, it might need to be scrapped. Then again, it might be as simple as making a button larger or changing the position of a contact form.
• Ask for best practices. We live in a world with an diverse range of opinions. Whether you’re using a consultant, an advertising agency, or a handful of vendors, ask them what they’re seeing that’s working at other dealerships. We often assume that they’ll volunteer this information freely, but sometimes it takes some prodding to get the “secret sauce” out of them.

It’s both exciting and intimidating when one realizes how much data is available to them. Doing the deep dive and making sense of all of the data is the key turning that intimidation in the excitement that comes with knowing that your advertising decisions are driven by the right information.