Do you think your customers feel the same about your company as you think they do?  Think again, they probably don’t.

These days, car dealerships, try to express their individuality from their competitors through value propositions. Almost every dealership has some sort of template or message as to “Why Buy from Us” integrated into their communications with their customers. Some find that they fall short in discovering or realizing what is the truth – customers are not as in love with them as they may think. Customers have their own perception as to what will make a lifelong marriage. Will the dealership realize that its promise hasn’t lived up to consumer expectations and strive to correct it? 

Quite often there’s a large gap between a company’s brand promise and the reality as perceived by their customers. A recent article on ZDNet cites several studies that show the disparity between what a company claims to deliver or strives to achieve, and the perception of the same by the consumer.  One of the studies cited in the article stated, “…fully 80 percent believe their firm offers a superior proposition. However, only 8 percent of customers held that same view.” This gap is so wide that it leaves little question that many companies are falling short of providing what the customer expects of them – and this leaves the door wide open for the customer to file for a loyalty divorce.

So how can your dealership avoid going to divorce court with your customer and turn the relationship into a wedded bliss – one that could lead into years of happiness and maybe even some offspring (referrals, repeat business)?  Like a conversation with your spouse, it all starts with communication.

With your customers taking to the web and social media at ever increasing rates, finding out what they are saying about you is step number one. Engaging with the customer is just a half-step behind. Imagine the customer who brought their vehicle into your service department for the third time for the same repair.  Bothered that she had to return time and again for the same issue, she told her friends in the office about her less than satisfactory experiences. She then spread the word on her Facebook wall and posted a message on your dealership’s Facebook page. She then left a two-star review on Google. Six months earlier, when she purchased her car, she said “I do” to your dealership and trusted that you’d be faithful to your promise: great customer service plus timely and accurate repairs.

You brand yourself as the dealer in town that everyone trusts to get the job done right. Yet this wasn’t the case with this customer and countless others that perhaps chose not to voice their frustrations. Some have decided to take their business elsewhere, even if that means a longer drive to a dealership in another area. Others are just waiting out the marriage, hoping that someday it will magically improve.   

What can you do for this customer? Start with a conversation through the mediums that she has publicly taken to.  After you’ve listened to, empathized with and addressed the concern, you can take back what you’ve learned from her (and others like her) and begin to implement strategies to improve any weakness you may have discovered in the relationship.  Perhaps you need to educate or train your staff; maybe staff changes need to be made; or perhaps it’s a simply a matter of better communication between the service team and the customer. 

While no individual or company will be perfect, if you have not bridged the gap between the customer’s expectations and the reality of your service, you may find the customer walking away after her six-month marriage, instead of riding out some of the rough patches until its time for an anniversary celebration.

It might be time to take a closer look at your dealership’s mission statement.  Are you fulfilling your promises and striving to improve. Or have you become complacent?  Are you listening to your customers and responding appropriately when concerns arise? Have you empowered your team to go above and beyond the customer’s expectations so that the customer will feel “warm and fuzzy” when they visit your dealership?

It’s time to take a look in the mirror and ask if you would say, “I do” if you were the customer. Or if it’s time to call off the wedding.

Geo-targeting and geo-fencing technology has been around for many years. Some social networks use it and provide businesses with ways to show customers offers and specials based on their current location. However, for the most part, these are application-specific. An individual would need to download an app, join a social network and opt-in for push notifications from the service to receive any ads on their phones. That may all be changing.

On July 24, according to an ABC News article Verizon Wireless became the first wireless carrier to launch a rewards program. While on the surface, it would seem that they are just joining the thousands of businesses across the country in rewarding customers for using their service, Verizon’s program has a different goal altogether…. collecting consumer location data for advertising purposes. This, in itself, is also not new. Verizon launched Verizon Selects in 2012, which is an opt-in program that uses subscriber surfing and location data to better target ads they see on the phone. The catch here is that to join Verizon Wireless’ new reward program, opting in to their Verizon Selects program is mandatory. Verizon currently has 100-million-plus subscribers, according to the ABC News article, which gives it a considerable audience. In addition, users do not have to download or use an app to have ads delivered to them. Unlike every other service that utilizes location data, Verizon has direct access and control over their service, as well as the ability to deliver ads to consumers without the need for an app.

This presents quite a few interesting questions. Will the carrot of a reward be enough to convince a person who otherwise would not opt to share their location data to be willing to do so? If the answer is yes, the Verizon Selects program will almost certainly become very valuable to Verizon and to their advertisers. There is no public information on how many Verizon subscribers are already participating in the Verizon Selects program. My guess is that offering freebies, discounts, experiences and prizes to their customers will entice enough people to give up their location and browsing data. Imagine being an automobile dealership in an auto mall and being able to push specials and ads to a Verizon consumer who is at your competitor’s dealership at that very moment shopping for a vehicle.

With the increasing concern consumers have over data privacy and the very public debacle that occurred last year when Verizon was revealed to have given the NSA access to phone records, it’s an interesting decision by Verizon to go public with its desire to collect more data. It’s proven, however, that consumers are willing to trade their data in exchange for discounts and rewards. Almost every major company – in every consumer-facing industry – has a rewards program; including automobile brands, entertainment, hospitality, grocery, travel and banking; to name some of the larger ones.

The fact that Verizon has the ability to use cell towers to locate customers rather than relying on the GPS or Wi-Fi connections on consumer’s phones, gives them a distinct advantage when it comes to location-based push marketing. It will be interesting to watch this program develop and see how many consumers decide to take advantage of Verizon’s new rewards program in exchange for their privacy.

Geo-targeting and geo-fencing technology has been around for many years. Some social networks use it and provide businesses with ways to show customers offers and specials based on their current location. However, for the most part, these are application-specific. An individual would need to download an app, join a social network and opt-in for push notifications from the service to receive any ads on their phones. That may all be changing.

On July 24, according to an ABC News article Verizon Wireless became the first wireless carrier to launch a rewards program. While on the surface, it would seem that they are just joining the thousands of businesses across the country in rewarding customers for using their service, Verizon’s program has a different goal altogether…. collecting consumer location data for advertising purposes. This, in itself, is also not new. Verizon launched Verizon Selects in 2012, which is an opt-in program that uses subscriber surfing and location data to better target ads they see on the phone. The catch here is that to join Verizon Wireless’ new reward program, opting in to their Verizon Selects program is mandatory. Verizon currently has 100-million-plus subscribers, according to the ABC News article, which gives it a considerable audience. In addition, users do not have to download or use an app to have ads delivered to them. Unlike every other service that utilizes location data, Verizon has direct access and control over their service, as well as the ability to deliver ads to consumers without the need for an app.

This presents quite a few interesting questions. Will the carrot of a reward be enough to convince a person who otherwise would not opt to share their location data to be willing to do so? If the answer is yes, the Verizon Selects program will almost certainly become very valuable to Verizon and to their advertisers. There is no public information on how many Verizon subscribers are already participating in the Verizon Selects program. My guess is that offering freebies, discounts, experiences and prizes to their customers will entice enough people to give up their location and browsing data. Imagine being an automobile dealership in an auto mall and being able to push specials and ads to a Verizon consumer who is at your competitor’s dealership at that very moment shopping for a vehicle.

With the increasing concern consumers have over data privacy and the very public debacle that occurred last year when Verizon was revealed to have given the NSA access to phone records, it’s an interesting decision by Verizon to go public with its desire to collect more data. It’s proven, however, that consumers are willing to trade their data in exchange for discounts and rewards. Almost every major company – in every consumer-facing industry – has a rewards program; including automobile brands, entertainment, hospitality, grocery, travel and banking; to name some of the larger ones.

The fact that Verizon has the ability to use cell towers to locate customers rather than relying on the GPS or Wi-Fi connections on consumer’s phones, gives them a distinct advantage when it comes to location-based push marketing. It will be interesting to watch this program develop and see how many consumers decide to take advantage of Verizon’s new rewards program in exchange for their privacy.

[This is part five in the "What's the Big Deal With Data Anyways?" series. Click here to read part four.]

Segmentation of DMS data can be defined as the process of dividing up your customer data into specific groups for the purpose of defining a more precise behavioral profile that will lead to a predisposition or higher purchase rate for a specific offering. Data Segmentation is when you break your customer base into groups and identify generally when, why and how a customer interacts or engages with your dealership. Did they previously respond to a specific product or service offering? Do they prefer a certain model? Did they stop purchasing? Do they only respond to discounts or price incentives, or do they only purchase a singular item from you?

The real goal of segmentation marketing is to deploy profitable marketing communications based on behavioral patterns exhibited previously by your customer. Segmentation is not just for the retail customer, but can be used in all of the dealership’s departments. For example, BMW has a program solely for independent body shops to increase the sales of certain OEM replacement parts purchased through their dealer network.  

Data segmentation allows a dealership to focus on the customer segments that are strongest and to put less emphasis on those that are weaker.

Data segmentation will provide a dealership with, at a minimum, five basic insights into its customer base which will allow it to build a framework for segmentation campaigns as follows:

1. Who are my customers?
2. What do they like?
3. What are they purchasing exactly?
4. How often to they purchase or visit?
5. What marketing channels are they responding to?

So what segments would could you potentially extract or filter from the volumes of customer DMS data you have already gathered?  Think store wide, departmentally, and what each department offers in the way of all products and services.

By starting with some basic data filters, you can build some very specific marketing groups, singularly or by grouping multiple filters:

• New vehicle purchasers within a certain time parameter
• Pre owned vehicle purchasers within a certain time parameter
• Service department customers who purchased elsewhere
• Mileage parameters – Between, greater than, less than
• Purchase date (both sales and service) – Between certain dates, or before and after a date
• Vehicle type (pre owned and new)
• Extended Warranty Purchase – Still eligible
• Customer Spend - Between, greater than, less than
• Last Dealership Visit  - Before or after a certain date
• Campaign response – Those who responded to specific campaigns in the past
• Total number of service visits – indicator of possible new vehicle purchase
• Preferred method of contact – text, email, etc.
• Wholesale parts purchases – frequency
• Accessory purchases 

The basic frame-work for a successful data segmentation and subsequent marketing initiative should not be daunting.  Actually it can be very simple if you start small.

1. Identify your key customer segments or groups.  For example one segment may be; customers with vehicles that have eclipsed over 90,000 miles and are 6 model years old. Another may be; customers who only respond to discounts or special offers. Yet another; those customers who have not come back for a specific period of time or those who have defected. 
2. Create four to six target groups.  Combine your segmented groups into just four or six sub groups to start. If possible, group those together with like demographics. As an example, group those customers who live more then 25 miles away from your dealership into one sub group.  Another group may be those customers who respond to service reminders.
3. Deliver different messages and engagement experiences.  Deliver a different product messages and each approach should be tailored to the specific group you are targeting, realizing their preferences and demographics.
4. Keep it as simple as possible.   Leave the complicated mass marketing stuff to your manufacturer. After all, they have the big marketing budgets to handle it. Simply choose your five or six target groups and focus your campaigns and efforts on them. You can always change them later if you feel your initial strategy is proving less than successful.
5. Measure the effectiveness of each campaign and adjust your strategy when necessary.  By measuring how your customers respond to your campaigns, you will be in a better position to predict their future buying habits and to polish your future marketing strategies.

By utilizing a more customer-focused approach, and by shifting resources away from the typical “shotgun” style mass marketing used by many dealerships today, you will be able respond more quickly to any market changes. This is while focusing foremost on your best customers up front while increasing profits and decreasing costs.

When deploying such a strategy, ensure that everyone in the dealership is on the same page when interacting with a customer who has responded to one of your segmented communications. This includes receptionists, BDC or call center scripting, service writers and sales employees. It is extremely important that all customers receive the same messaging, tone and product or service positioning that was offered in the communication. The more consistency you employ, the higher your ROI will be. To your success!

[This is part five in the "What's the Big Deal With Data Anyways?" series. Click here to read part four.]

Segmentation of DMS data can be defined as the process of dividing up your customer data into specific groups for the purpose of defining a more precise behavioral profile that will lead to a predisposition or higher purchase rate for a specific offering. Data Segmentation is when you break your customer base into groups and identify generally when, why and how a customer interacts or engages with your dealership. Did they previously respond to a specific product or service offering? Do they prefer a certain model? Did they stop purchasing? Do they only respond to discounts or price incentives, or do they only purchase a singular item from you?

The real goal of segmentation marketing is to deploy profitable marketing communications based on behavioral patterns exhibited previously by your customer. Segmentation is not just for the retail customer, but can be used in all of the dealership’s departments. For example, BMW has a program solely for independent body shops to increase the sales of certain OEM replacement parts purchased through their dealer network.  

Data segmentation allows a dealership to focus on the customer segments that are strongest and to put less emphasis on those that are weaker.

Data segmentation will provide a dealership with, at a minimum, five basic insights into its customer base which will allow it to build a framework for segmentation campaigns as follows:

1. Who are my customers?
2. What do they like?
3. What are they purchasing exactly?
4. How often to they purchase or visit?
5. What marketing channels are they responding to?

So what segments would could you potentially extract or filter from the volumes of customer DMS data you have already gathered?  Think store wide, departmentally, and what each department offers in the way of all products and services.

By starting with some basic data filters, you can build some very specific marketing groups, singularly or by grouping multiple filters:

• New vehicle purchasers within a certain time parameter
• Pre owned vehicle purchasers within a certain time parameter
• Service department customers who purchased elsewhere
• Mileage parameters – Between, greater than, less than
• Purchase date (both sales and service) – Between certain dates, or before and after a date
• Vehicle type (pre owned and new)
• Extended Warranty Purchase – Still eligible
• Customer Spend - Between, greater than, less than
• Last Dealership Visit  - Before or after a certain date
• Campaign response – Those who responded to specific campaigns in the past
• Total number of service visits – indicator of possible new vehicle purchase
• Preferred method of contact – text, email, etc.
• Wholesale parts purchases – frequency
• Accessory purchases 

The basic frame-work for a successful data segmentation and subsequent marketing initiative should not be daunting.  Actually it can be very simple if you start small.

1. Identify your key customer segments or groups.  For example one segment may be; customers with vehicles that have eclipsed over 90,000 miles and are 6 model years old. Another may be; customers who only respond to discounts or special offers. Yet another; those customers who have not come back for a specific period of time or those who have defected. 
2. Create four to six target groups.  Combine your segmented groups into just four or six sub groups to start. If possible, group those together with like demographics. As an example, group those customers who live more then 25 miles away from your dealership into one sub group.  Another group may be those customers who respond to service reminders.
3. Deliver different messages and engagement experiences.  Deliver a different product messages and each approach should be tailored to the specific group you are targeting, realizing their preferences and demographics.
4. Keep it as simple as possible.   Leave the complicated mass marketing stuff to your manufacturer. After all, they have the big marketing budgets to handle it. Simply choose your five or six target groups and focus your campaigns and efforts on them. You can always change them later if you feel your initial strategy is proving less than successful.
5. Measure the effectiveness of each campaign and adjust your strategy when necessary.  By measuring how your customers respond to your campaigns, you will be in a better position to predict their future buying habits and to polish your future marketing strategies.

By utilizing a more customer-focused approach, and by shifting resources away from the typical “shotgun” style mass marketing used by many dealerships today, you will be able respond more quickly to any market changes. This is while focusing foremost on your best customers up front while increasing profits and decreasing costs.

When deploying such a strategy, ensure that everyone in the dealership is on the same page when interacting with a customer who has responded to one of your segmented communications. This includes receptionists, BDC or call center scripting, service writers and sales employees. It is extremely important that all customers receive the same messaging, tone and product or service positioning that was offered in the communication. The more consistency you employ, the higher your ROI will be. To your success!

[Click here to read part three in this series.]

Over the past few years numerous new marketing companies have emerged as a solution for dealers’ digital and print marketing needs. Some of these new entities specialize in SEO, some will write your social medial posts and some will manage your online dealer reputation. Yet the largest growth is seen in companies that go after “orphaned” service and sales customers. They try and get them back to the dealership, generally for a healthy fee, if and when they succeed. Wouldn’t it have been nice to have not lost those customers in the first place? To not have to pay again to reacquire them? But that is a subject for another story.

While customer re-acquisition programs do have some success, dealers should be very careful when directing a third party company as to which customers to market to. Don’t let the vendor make the choice. It could end up hurting you instead of helping. Using your data for a mass market approach is contrary to all segmentation marketing principles. It will garner you a much lower ROI.

Wikipedia defines Mass Marketing as a “market coverage strategy in which a firm decides to ignore market segment differences and appeal the whole market with one offer or one strategy.” This is exactly what these third party vendors suggest and is exactly what should NOT be done. In my next blog I will cover in more detail the benefits and value of market segmentation. How to divide your data into a number of segments, allowing you to target a specific message to a specific audience at a specific time.  This approach is what will garner the best ROI. 

Sadly this is not the approach most third party vendors take.Unfortunately, some have really muddied up the field and in fact, do not help the dealer at all. They have a convincing sales guy that says “if you give me a copy of your database, I can help you sell another 40 cars per month.” In most cases, it’s just not completely true. Yes, you may get few sales. But generally no one quantifies the results and much of it ends up being nebulous, at a big cost to you. Additionally, with this type of marketing you may end up alienating as many customers as you bring in.

In most cases it just does not work to do it this way: “Let’s go into your database and find everyone that has not bought a car in last 5 years and send them a generic letter” – how many would that sell? Perhaps one, two, a few? Now tighten up the audience. Filter out or segment some customers and make it more specific to individual customers….say we take a look at everyone that has a Honda Civic with 90,000 miles and more than $5,000 in maintenance costs – that’s your target mailer. And send them a Civic specific ad touting its product value and your intrinsic value as their dealer – not something like low interest rates, or something that does not relate much to the customer. Let’s leave that up to the OEMs -- they do a wonderful job showing us customers dancing in the showrooms. When was the last time you actually had a customer dancing on your showroom floor because they were so happy with the financing you just got them? Really? It’s time to get personal with your customers and show them that you know what they want, when they want it and that you can provide the necessary tools for them to get it.

Another example of failing to correctly use data is in the aftermarket. There are so many call centers out there for extended service contracts that give dealers a commission for providing their database list to call from. They call or send a mailer to all these customers without any clue if they need a service contract or not – it’s not helping dealers, it’s hurting them. I recently received a mailer from Mercedes Benz soliciting a prepaid maintenance program when I had just bought one with my new Mercedes ML a few weeks before. This just makes the dealership look bad and only serves to alienate customers rather than drive them back into the dealership. I truly believe a dealership could do a better job marketing me a maintenance program on their own -- after the sale -- if they had only tried. A quick segmentation of those customers who did not buy a maintenance plan would provide a nice call or mail list to work from. And I am just guessing that the grosses would be higher on the plan sales sold directly by the store.

Don’t allow your marketing partner to put together a blanket program. Use your data – I promise you there’s gold in them there databases! It just has to be properly mined, managed and applied. Programs should be designed around what will best appeal to the customer. Customers in different sized markets will have very different motivators. Look at what your customers have already purchased and don’t send out blanket marketing pieces. As I mentioned above I recently leased a new vehicle. Not even a month after I purchased it I received an offer for new tires from my selling dealer. My car was a month old! I have a 30K lease on it and should never need tires during the lease. I looked at that and thought, “You’ve got to be kidding me!” This type of blanket marketing causes customers to lose faith in the dealer. That’s the whole point of segmenting -- to avoid this type of situation.

The same principals should be applied to seasonal communications. Don’t send winter-related communications to customers that live in Florida! It’s crazy but we see it happen all of the time.

The fact remains that by segmenting your customers and then targeting those groups with relevant offers and messages, you will save money tenfold on mass marketing and  you will see a better ROI

Watch for my next blog, part 5 of this series, where I’ll cover data segmentation in greater detail.

[Click here to read part three in this series.]

Over the past few years numerous new marketing companies have emerged as a solution for dealers’ digital and print marketing needs. Some of these new entities specialize in SEO, some will write your social medial posts and some will manage your online dealer reputation. Yet the largest growth is seen in companies that go after “orphaned” service and sales customers. They try and get them back to the dealership, generally for a healthy fee, if and when they succeed. Wouldn’t it have been nice to have not lost those customers in the first place? To not have to pay again to reacquire them? But that is a subject for another story.

While customer re-acquisition programs do have some success, dealers should be very careful when directing a third party company as to which customers to market to. Don’t let the vendor make the choice. It could end up hurting you instead of helping. Using your data for a mass market approach is contrary to all segmentation marketing principles. It will garner you a much lower ROI.

Wikipedia defines Mass Marketing as a “market coverage strategy in which a firm decides to ignore market segment differences and appeal the whole market with one offer or one strategy.” This is exactly what these third party vendors suggest and is exactly what should NOT be done. In my next blog I will cover in more detail the benefits and value of market segmentation. How to divide your data into a number of segments, allowing you to target a specific message to a specific audience at a specific time.  This approach is what will garner the best ROI. 

Sadly this is not the approach most third party vendors take.Unfortunately, some have really muddied up the field and in fact, do not help the dealer at all. They have a convincing sales guy that says “if you give me a copy of your database, I can help you sell another 40 cars per month.” In most cases, it’s just not completely true. Yes, you may get few sales. But generally no one quantifies the results and much of it ends up being nebulous, at a big cost to you. Additionally, with this type of marketing you may end up alienating as many customers as you bring in.

In most cases it just does not work to do it this way: “Let’s go into your database and find everyone that has not bought a car in last 5 years and send them a generic letter” – how many would that sell? Perhaps one, two, a few? Now tighten up the audience. Filter out or segment some customers and make it more specific to individual customers….say we take a look at everyone that has a Honda Civic with 90,000 miles and more than $5,000 in maintenance costs – that’s your target mailer. And send them a Civic specific ad touting its product value and your intrinsic value as their dealer – not something like low interest rates, or something that does not relate much to the customer. Let’s leave that up to the OEMs -- they do a wonderful job showing us customers dancing in the showrooms. When was the last time you actually had a customer dancing on your showroom floor because they were so happy with the financing you just got them? Really? It’s time to get personal with your customers and show them that you know what they want, when they want it and that you can provide the necessary tools for them to get it.

Another example of failing to correctly use data is in the aftermarket. There are so many call centers out there for extended service contracts that give dealers a commission for providing their database list to call from. They call or send a mailer to all these customers without any clue if they need a service contract or not – it’s not helping dealers, it’s hurting them. I recently received a mailer from Mercedes Benz soliciting a prepaid maintenance program when I had just bought one with my new Mercedes ML a few weeks before. This just makes the dealership look bad and only serves to alienate customers rather than drive them back into the dealership. I truly believe a dealership could do a better job marketing me a maintenance program on their own -- after the sale -- if they had only tried. A quick segmentation of those customers who did not buy a maintenance plan would provide a nice call or mail list to work from. And I am just guessing that the grosses would be higher on the plan sales sold directly by the store.

Don’t allow your marketing partner to put together a blanket program. Use your data – I promise you there’s gold in them there databases! It just has to be properly mined, managed and applied. Programs should be designed around what will best appeal to the customer. Customers in different sized markets will have very different motivators. Look at what your customers have already purchased and don’t send out blanket marketing pieces. As I mentioned above I recently leased a new vehicle. Not even a month after I purchased it I received an offer for new tires from my selling dealer. My car was a month old! I have a 30K lease on it and should never need tires during the lease. I looked at that and thought, “You’ve got to be kidding me!” This type of blanket marketing causes customers to lose faith in the dealer. That’s the whole point of segmenting -- to avoid this type of situation.

The same principals should be applied to seasonal communications. Don’t send winter-related communications to customers that live in Florida! It’s crazy but we see it happen all of the time.

The fact remains that by segmenting your customers and then targeting those groups with relevant offers and messages, you will save money tenfold on mass marketing and  you will see a better ROI

Watch for my next blog, part 5 of this series, where I’ll cover data segmentation in greater detail.

This blog is the first in a series I plan based around how to better use dealer data in marketing to customers. There is a reason that ‘Big Data’ has been a hot topic in the automotive industry for the last few years. Many retailers in other industries are using it quite successfully to target their marketing and offers to their customers based on transactional and behavioral data. Aside from some off-lease marketing, most dealers aren’t even paying attention to the data they have, much less using it in combination with outside data. It is very difficult, if not impossible, to create customer loyalty by utilizing a shotgun approach in your marketing communications for your entire customer base.

However, this is what many dealers still do and what many vendors are still advocating. A perfect example of this “old school” mentality and outdated approach is in the continued use of service reminders. For example, I continually get service reminders from my local Ford dealer regarding a vehicle I have not owned in almost 5 years. Not only is it a waste of the dealer’s marketing dollars -- as I am sure I am not the only customer in his database that no longer owns the vehicle -- but it is also a contrary practice to building lasting customer retention though the use of meaningful interactions. It is proven that relevant messages to highly targeted groups of customers converts into more sales, while building significantly increased customer loyalty. Impressing upon your customers that you are paying attention to their specific needs and wants is far more effective than sending them a bunch of communications that don’t pertain to their individual circumstances.

Most major retailers track their customer’s behavior through the use of loyalty programs and other internal SKU tracking methods. Take Costco and Sam’s Club, for example. They track everything their customers buy from them. Through skewing and product codes, they know exactly what their customers have purchased and what they are likely to repurchase from them in the future. They also have the ability to calculate a profit margin for each customer, and to track their customer lifetime value to the dealership.

Why is this important? In the event you lose a long time customer with a high lifetime value, it may require the acquisition of many “smaller” customers to make up the revenue and profit loss of the one higher value customer. Most retail manufacturers know this. They work cooperatively with retailers to deliver relevant coupons and offers tailored for specific customers based on their past purchase behavior. Dealers have the same ability to utilize this data using parts numbers and labor operation codes to generate relevant offers for their customers. For example, with the recent increase in vehicle recalls, dealers should be segregating their recall customers from non-recall customers and communicating with them utilizing a different message. 

On the vehicle sales side, NADA publishes their formula as to how to identify what customers, based upon a number of factors that can be easily pulled from your DMS, are “in market” for a new vehicle. But surprisingly, many aren’t using the data. Even many of the vendors that dealers hire, which claim to use the dealers’ data, aren’t using it effectively. This is evidenced by the low ROI these communications generate. Vehicle OEM’s are notorious for using saturation marketing such as that utilized during the current NBA playoffs. This is being sent to audiences that are much less tolerant today than they were even five years ago.  Marketing needs to be about communicating useful information that is memorable and meaningful, not about the repetition of a non-relevant offer (remember your service reminders here).

Blasting a generic sales message to a list of customers that have not brought a car in the last few years will most likely only result in a couple of sales. And you risk the opportunity of alienating that customer for a lifetime.

A much better approach is to use predictive analysis – look at what the customer has purchased, the type of vehicle they own and the mileage on those vehicles, so that you may come up with a targeted, accurate analysis of when and what action the customer is pre-disposed to take. Through the use of transactional data dealers already have, they could instead create a more specific list of customers that would have a much higher propensity to respond. Such a list of segmented customers could be those who own a specific model with 90,000 miles or more, who have also spent more than $5,000 in maintenance costs, and are approaching a major service interval. A targeted mailer sent to this precise list will produce dramatically better results than the aforementioned blast to your entire customer base. The message delivered is more relevant, more meaningful and will generate a higher ROI.

In my next few blogs I plan a series to more fully cover why dealers aren’t using the data they have, show dealers how to get the data they already possess, what to do with it when they have it and how to measure the results after they’ve used it. Using your own customer data to target your message to the most relevant customer segment will produce better results, increase the likelihood that your customers pay attention to your message and take action. 

This blog is the first in a series I plan based around how to better use dealer data in marketing to customers. There is a reason that ‘Big Data’ has been a hot topic in the automotive industry for the last few years. Many retailers in other industries are using it quite successfully to target their marketing and offers to their customers based on transactional and behavioral data. Aside from some off-lease marketing, most dealers aren’t even paying attention to the data they have, much less using it in combination with outside data. It is very difficult, if not impossible, to create customer loyalty by utilizing a shotgun approach in your marketing communications for your entire customer base.

However, this is what many dealers still do and what many vendors are still advocating. A perfect example of this “old school” mentality and outdated approach is in the continued use of service reminders. For example, I continually get service reminders from my local Ford dealer regarding a vehicle I have not owned in almost 5 years. Not only is it a waste of the dealer’s marketing dollars -- as I am sure I am not the only customer in his database that no longer owns the vehicle -- but it is also a contrary practice to building lasting customer retention though the use of meaningful interactions. It is proven that relevant messages to highly targeted groups of customers converts into more sales, while building significantly increased customer loyalty. Impressing upon your customers that you are paying attention to their specific needs and wants is far more effective than sending them a bunch of communications that don’t pertain to their individual circumstances.

Most major retailers track their customer’s behavior through the use of loyalty programs and other internal SKU tracking methods. Take Costco and Sam’s Club, for example. They track everything their customers buy from them. Through skewing and product codes, they know exactly what their customers have purchased and what they are likely to repurchase from them in the future. They also have the ability to calculate a profit margin for each customer, and to track their customer lifetime value to the dealership.

Why is this important? In the event you lose a long time customer with a high lifetime value, it may require the acquisition of many “smaller” customers to make up the revenue and profit loss of the one higher value customer. Most retail manufacturers know this. They work cooperatively with retailers to deliver relevant coupons and offers tailored for specific customers based on their past purchase behavior. Dealers have the same ability to utilize this data using parts numbers and labor operation codes to generate relevant offers for their customers. For example, with the recent increase in vehicle recalls, dealers should be segregating their recall customers from non-recall customers and communicating with them utilizing a different message. 

On the vehicle sales side, NADA publishes their formula as to how to identify what customers, based upon a number of factors that can be easily pulled from your DMS, are “in market” for a new vehicle. But surprisingly, many aren’t using the data. Even many of the vendors that dealers hire, which claim to use the dealers’ data, aren’t using it effectively. This is evidenced by the low ROI these communications generate. Vehicle OEM’s are notorious for using saturation marketing such as that utilized during the current NBA playoffs. This is being sent to audiences that are much less tolerant today than they were even five years ago.  Marketing needs to be about communicating useful information that is memorable and meaningful, not about the repetition of a non-relevant offer (remember your service reminders here).

Blasting a generic sales message to a list of customers that have not brought a car in the last few years will most likely only result in a couple of sales. And you risk the opportunity of alienating that customer for a lifetime.

A much better approach is to use predictive analysis – look at what the customer has purchased, the type of vehicle they own and the mileage on those vehicles, so that you may come up with a targeted, accurate analysis of when and what action the customer is pre-disposed to take. Through the use of transactional data dealers already have, they could instead create a more specific list of customers that would have a much higher propensity to respond. Such a list of segmented customers could be those who own a specific model with 90,000 miles or more, who have also spent more than $5,000 in maintenance costs, and are approaching a major service interval. A targeted mailer sent to this precise list will produce dramatically better results than the aforementioned blast to your entire customer base. The message delivered is more relevant, more meaningful and will generate a higher ROI.

In my next few blogs I plan a series to more fully cover why dealers aren’t using the data they have, show dealers how to get the data they already possess, what to do with it when they have it and how to measure the results after they’ve used it. Using your own customer data to target your message to the most relevant customer segment will produce better results, increase the likelihood that your customers pay attention to your message and take action. 

A fascinating article in Forbes shared a concept that is increasingly winning over customers. In the article, the author described what he termed “anticipatory customer service” as “a customer experience that manages to serve even the unexpressed wishes and needs of your customers through the use of technology and automation.”

People are busy. A gesture such as an emailed service reminder that a customer can view when they have time in their hectic schedule, is certainly appreciated by many. However, Anticipatory Customer Service takes this to another level. Depending on the circumstances and the customer preferences, not only would you e-mail the customer, you would also call them, send a text message and then a letter as well. This method works well for customers who want this communication. When a customer drops their car off for service, they want to be kept up-to-date on progress and completion.  If they’re in a meeting, they might prefer a text message. While if they are working at their computer, an email might be their preferred method. Anticipatory customer service is all based on providing consumers information before they know they want it themselves.

The popular pharmacy chain Walgreens has refined the art of Anticipatory Customer Service and makes dealing with them easy and convenient. They allow you to refill prescriptions online or via a free app. If that’s too hard (or you forget), they will e-mail you. All you then have to do is reply, and they will refill your prescription. When it is ready for pickup, they will email you again. If you forget to pick it up they will then call you and remind you that it’s ready… multiple times. Once you pick it up, they thank you through their rewards program. No doubt this works to Walgreens’ advantage by decreasing the amount of time between a customer being eligible for a refill, and actually refilling it. It also decreases the time between when the refill is ready and the customer collects it. The pharmacy doesn’t make money until the prescription is picked up. By continuously reminding customers, they are increasing their revenue.  Of course, there is a fine line between using multiple methods of communication and badgering a customer. So businesses need to ensure that there is a way for customers to inform them of their preferences.  This is simple through opt-out links on email communication and the “stop” message for text messaging.

Parallels definitely exist in the automotive world.  For example, minor and regularly scheduled service such as an oil change. Walgreens doesn’t know how many pills you have remaining, just as you may not know how many miles the customer has driven since their last service. However, based on the customer’s visit history, it can be closely approximated.

Many companies send out one email and call it a day. The strength in Walgreens system is its repetitiveness. A service customer may get that e-mail reminder and not be ready for an oil change based on mileage; or perhaps think it’s a good idea but be too busy to make an appointment. By continuing to contact them via multiple methods, you give yourself more opportunities to reach the customer at the moment in which they are ready.  A scenario none of us want to happen is to remind the customer, have them agree to the service, then they become busy and forget. You fail to stay in contact, and on a future date the customer pops into a Jiffy Lube to get that convenient oil change, simply because they are near it. I’m sure Jiffy Lube thanks you, however.

Making it as easy and convenient as possible for your customer to do business with you is the key point here. There is no reason why you can’t text a customer and allow them to text you back to make an appointment. The same applies to email, or a phone call reminding the customer about their upcoming service appointment. According to the article, “it’s here that you shift your customers’ perception of your company out of the ‘they’re perfectly fine, for now’ to ‘they’re my one and only.’ It’s here that they become truly committed to, loyal to, the idea of working with you on a permanent basis.”

A more proactive approach and the use of technology to maintain contact with your customers about information they WANT to receive, can help builds better relationships and a more loyal customer base.