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.

With NFL football fans gearing up for another season, DIRECTV is once again offering new customers the 2014 NFL Sunday Ticket for free along with deeply discounted prices and an upgraded DVR Genie on several of the programming packages.  What’s the catch?  The special prices are valid for only the first twelve months of a twenty-four month contract. And if you want to receive the Sunday Ticket for the 2015 season, you’ll need to pay regular price.

It’s a great deal for a new customer. but let’s imagine that two years ago you signed up for DIRECTV and have fulfilled your twenty-four month contract by paying $66.99 per month.  You see the new customer incentives and you give DIRECTV’s “award-winning customer service” department a call and ask to be given the same attractive offer – a discounted monthly rate, updated equipment (that you have to lease from them as well for an added fee), and the NFL Sunday Ticket that normally costs in excess of $300.  Your friendly customer service representative informs you that they appreciate your business, your prompt payments and for your interest in continuing to subscribe to their satellite service.  Then they inform you that the offer is for new customers only and that existing customers aren’t eligible.  There’s a moment of silence on the line as you scratch your head and wonder why your loyalty isn’t being rewarded with anything more than a thank you.  You return to the line and ask for a manager.  While waiting for your call to be transferred, you simply can’t wrap your head around the fact that new customers will save nearly 50% off their monthly bill for the first twelve months; obtain new equipment and the NFL Sunday Ticket - something that has been on your wish list since the Super Bowl.  The supervisor takes your call and you state your case, but unless you have the negotiating skills of a criminal defense attorney, or threaten to cancel, you’re not getting the new customer deal. This sure doesn’t seem like the way to keep customers for long and perhaps one of the reasons DIRECTV seems to be looking for new customers all the time. 

With shrinking margins on new vehicle sales, dealers are finding themselves more reliant than ever on service absorption, referrals and repeat business. In today’s world of information, price shopping and homogenization, it’s more important than ever before to focus on retention. You can kill the customer with kindness, provide convenient hours and build personal relationships with your customers through employee retention, but when it comes time to buy a new vehicle, every customer wants a good deal. Customers who have shown your business loyalty come to you with an expectation of reciprocity. Regardless of whether their first experience with you buying a vehicle was exceptional or frustrating, they will not only expect a better experience, but also demand it. They see your sales ads in the newspaper and online just the same as a potential new customer does. In our increasingly regulated business, whom would you rather sell your advertised loss leader to? The new customer you will never see again, or the one that’s been loyal to you for years? I know what my answer would be.

If you’re operating a car dealership on the DIRECTV model, you’re spending a lot of your efforts trying to lure the new customer instead of taking care of the most captive audience you have – your current customer. That loyal customer could be waiting to see just how much of a commitment you are willing to make to them. So whether your loyal customer pays cash for your loss leader, or buys the accessory-loaded luxury SUV and the premium maintenance package - make sure they feel special and experience the new customer treatment all over again.

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.

A recent article on the Huffington Post asked why consumers are still buying GM vehicles despite all of the recent recalls. There’s no question that there are many concerned owners of GM vehicles. According to the article, GM has “issued 44 recalls in North American this year, stemming from problems that have been tied to 50 crashes and 13 dealers, [yet] the company recently said its sales for the month of May were up 13 percent from the month before, the biggest May gain in seven years.” Common sense might lead a person to believe that consumers would become more hesitant to purchase a GM vehicle with all of the problems that are occurring. But the numbers indicate quite the opposite.

Loyalty doesn’t always follow reason. As the article indicates, there are many points that make consumers remain loyal in times of turmoil. One reason the article cites is ignorance of the recalls themselves. “Experts say about one-third of people with a vehicle affected by automaker recalls never bring their car in for repair.” Another reason is that people may perceive that these recalls are for vehicles made in the past and don’t apply to recent vehicles (which is untrue).

The last reason cited in the article is the one most likely to be the case: that GM has been successful at creating emotional bonds with consumers over time. Consumers are quick to back companies that have supported them in times of crisis, especially if the situation is handled properly. GM CEO, Mary Barra, has been running damage control well during her tenure. Her public commitment to identify any issues with GM cars and solve the problems seems zealous in nature at times. Many consumers are willing to forgive companies – especially companies of which they are already brand loyalists – if the company is willing to back heir product quality and rectify the issues.

Think of your favorite store. You may love shopping at that store and patronize it frequently. Perhaps one day you have a problem with a product or a bad experience. If handled properly and made whole, your opinion of the business may even increase. People understand that nobody is perfect. All they want is to know that the business cares about them as a customer and values their business enough to fix the problem.

GM has certainly experienced very trying times over the last 6 years going through bankruptcy and requiring the government’s assistance. It will certainly be an uphill battle to regain consumer confidence in the quality of their vehicles. As a society, however, we tend to have short memories. While GM will be forced to be more vigilant in vehicle quality and customer retention efforts, those efforts may prove to reinforce the emotional attachment its current brand loyalists possess and also earn it some new ones.

There are many things that companies can do to earn a customer’s loyalty. However, e-mail marketing isn’t typically high on the list. Consumers get barraged continuously with marketing messages via e-mail. As you go through your in-box, how many do you delete without even reading them in order to get to those you are interested in reading? A very good article on the Small Business Success blog shared some tips on how to write e-mails that will more effectively engage the recipient.

Consider these statistics shared in the blog article:

1. Personalized emails improve click through rates by 14% and conversion rates by 10%.
2. Leads who are nurtured with targeted content produce a 20% increase in sales opportunities.
3. 70% of buying experiences are based on how the customer feels they are being treated.

In my recent data series blogs, I covered how dealers who use their data to effectively target consumers with relevant messages will increase responses. When relevant messages are relayed to the right customers, they tend to feel the company is more in tune with their needs and wants. They no longer feel like just another address on your e-mail list. As you establish a relationship with the customer, they will begin to value your communications and pay attention to them, rather than discard them into their trash, spam or, worse, opt-out of your marketing.

Targeting segmented customers is definitely something dealers should be doing. However, the content of any email message is equally important. Generic e-mails that are obviously sent en masse will detract from the consumer’s perception that you are actually looking out for their best interest.

In order to increase the chance that a customer perceives your e-mail message as helpful rather than intrusive, try and make your e-mails as personalized as possible. If you have cleaned up your data, it is relatively easy to insert a customer’s first name and the make and model of the vehicle.

At the same time, ensure that any attempts to send personalized messages to your customers are not destroyed by poor attention to details. Double check that there are no improper formatting or incorrect merge fields because of erroneous data in the wrong fields in your CRM.  

In the end, it’s not just about using past behavior to predict the future. It’s also about how you can best convey your message to your target group. If your customers only receive helpful reminders and relevant messages from you, you will build relationships that help create loyalty and increase retention.

​Recently, AdAge reported that Walmart is starting a loyalty program. Based on their price-match guarantee, Walmart is launching an app named “Savings Catcher,” which consumers can use to receive refunds for items purchased at Wal-Mart that have been found for a lower price at a competitor. While many stores have price-match guarantees, this app ups the ante. In the past, customers were responsible for discovering the lower prices and then bringing a physical ad into a Walmart for the price match. This, of course, required time spent by the customer researching their purchase online. Unless a customer is aware of a lower price, or discovers one accidentally, it is unlikely many will spend the time researching all of their purchases just to save a few dollars. “Savings Catcher,” however, doesn’t require any time for a consumer to take advantage of these savings. According to the article, all shoppers need to do is scan a receipt for the items purchased at Walmart into the app. A third-party tracking firm will then discover the lower prices for them and refund the savings to the consumer in the form of a Wal-Mart gift card. Many consumers already view Walmart as having low prices, which is why consumers flock to the stores in droves. The addition of this loyalty program is likely to further instill this into consumers and attract even more customers.

While a businessperson might question how the “low price leader” that sells on slim margins can afford to do this, the answer is actually a very simple one. Data.

By participating in the program, consumers are trading information. This information will allow Wal-Mart to encourage shoppers to buy even more items from them using a pretty unconventional approach. Most companies use loyalty data to increase marketing effectiveness through targeting. Walmart, however, says they aren’t going to. According to the article, Walmart is going to give consumers access to complied loyalty data that will let the customer search and sort their receipts; get pie charts breaking down how they spend their money; generate ‘predictive shopping lists;’ keep a running tab of in-store purchases to stay on budget; get notifications when there’s a manufacturer coupon available for an item on their list; or get the best-priced bundle of items within a pre-set budget. Senior vice president of e-commerce and mobile for Walmart said, “We found the best shopping list is one you don’t actually have to create.”

It’s certainly an interesting concept. Whether Walmart shoppers will embrace the many features available within the application to dictate their shopping lists remains to be seen. It’s certainly easy to see how the pricing guarantee and automatic refund feature would be attractive, not only to Walmart’s existing customers, but to new customers. If this program is proven to work as described, and the third-party pricing comparison is accurate, it could instill even more confidence into shoppers that Walmart really is where they will save the most money. And not just on sale items, but on everything. And that is a pretty powerful incentive for people to shop at Walmart.

[This is part 6 in the “What’s the Big Deal With Data Anyways?” series. Click here to read part 5]

The whole goal of this series is to help dealers understand that there is no need to be afraid of your data. It is one of the most valuable assets a dealership has and, when used correctly, can increase revenue by improving the effectiveness of any marketing.

Previously in this series, we covered segmentation of the DMS and CRM database. If you view those segments as control groups, you will be in a better position to view the real ROI of your data marketing efforts. Measuring ROI is not easy. But you don’t need to be a statistician to succeed. You simply need to measure certain elements for your data marketing efforts and compare them to customers who are not part of those efforts, segments or control groups.

In a dealership, the four most important metrics for measuring ROI are:

1. Average customer-pay RO amount for the segment customers vs. the non-segment customers.
2. Annual visit frequency for the segment customers vs. the non-segment customers.
3. Annual retention rates of the segment customers vs. the non-segment customers.
4. Vehicle repurchase activity of the segment customers vs. the non-segment customers.

You don’t have to rely on third-party marketing companies to take your data and tell you how to market. They generally lack knowledge about how to measure a targeted marketing campaign’s results. Therefore, you’ll never know if your efforts are succeeding.

The most effective way to measure ROI, program lift and retention is to assign every customer to a type of control group. Control groups can be determined by any number of qualifiers such as: make or model, mileage, distance from the dealership, lease customers, pre-owned customers, parts customers, time elapsed since purchase or any other segments that could be used in targeted campaigns.

While this may sound like a daunting task, believe it or not, most dealers are well on their way to accomplishing this already. Many assign every customer a unique customer ID number in service and, at times, in sales. This ID number is stored in a dealer’s DMS as a unique identifier for that customer. The dealership uses this ID to track activities such as vehicle service records.

To segment your database you simply need to add a check digit to the already existing customer ID number. This number appends the customer ID in the DMS. By simply adding multiple number identifiers, customers can belong to a single group, or to multiple groups.

Once your customers are segmented into the appropriate group(s), your DMS’ report writer function (or equivalent) will allow you to run simple reports that show exactly which groups and customers are responding the most, spending the highest and retained the longest.

When looking at the four metrics listed above, it becomes easy to see which subsets of customers are performing the best in each category. This can assist in identifying where to spend your marketing budget. It has always bothered me when I ask a service writer or manager which of their service marketing efforts are working the best. I find that their responses are typically based on that month’s coupon redemptions. This type of visual performance tracking of service marketing is a recipe for wasted marketing dollars.

Throughout this series I have been touting the benefits of customer segmentation and the positive effect it can have on your marketing efforts. Think about looking at each group before you commit to any marketing campaigns, regardless of the content. It is so important to determine ahead of time which groups will receive the message based upon their past performance. How many times do we send, at our expense, communications to customers that either live too far from the dealership, or don’t have the vehicle anymore? This type of marketing is almost guaranteed to get no response, yet it is such a common practice in our industry. I see it almost every time I step into a dealership. Insist that your marketing group, regardless of if internal or a third party, is responsible for marketing the correct message to the correct group. It has been proven over and over again in almost every type of business that smaller, highly target messaging will create a much better response than any unrelated mass approach.

[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.

As I mentioned in part two of this series, many DMS providers make it difficult for dealers to download their customer database. In some cases, it’s because there are control issues arising between dealers and their DMS (or CRM) as to who actually owns this data. Another issue can be that a provider fears their dealers will take the data and switch companies. Any dealership’s database of customer transactions should be treated as pure gold and it would be a catastrophe to lose this data when a change of providers occurs. Dealers would be wise to develop a business case surrounding their data. It is important to understand how vital it is to clean up this data. The time involved in so doing will actually save money by increasing the effectiveness of any marketing.

Most providers have tools built into their system that can be used to access and download this data. All big DMS providers have report writers or generator functions with which a dealer can download sets of users. Dealers can use this to generate reports on sets of customers and can use these reports to start the process in bite size chunks instead of trying to tackle their entire database all at once. In choosing whether to do this from your DMS or CRM, I would start with your DMS data. Both are important to clean. But your DMS data is the most prominent. This database is huge and can be mined more effectively. It contains all the long-term customers from which continuous revenue can be generated.

If a dealership does not have anyone with the proper skillset to accomplish this, there are third party companies such as Authenticon and StoneEagle that can assist. These companies have built workarounds with which they can use to access a dealership’s data, even from the most difficult providers.

The following is a good road map to use to clean up the dealership’s database.

1. Look for duplicates. Just about every DMS has a report generator that allows a dealer to export these files into an Excel format. In this format, it becomes relatively simple to sort fields and identify duplicate entries. Look for duplicated names, phone numbers, and addresses and attempt to consolidate these duplications into a single record. Start with the oldest records and work backwards to the present. Once one group is cleaned up, proceed to the next group. This makes the task a little more manageable.

2. Once the database is consolidated and duplicates removed, there are then two steps that should be done with two different USPS database services to ensure 100% address accuracy. It is important to get the sequence correct as follows:

a)    First run the entire database through the USPS’ National Change of Address database (NCOA). This can be done directly with the post office using their NCOAlink System, or through third party suppliers such as Melissa Data. They will return the database with current mailing addresses.

b)    After running the database through NCOA, then take the entire database and run it through another U.S. Postal Service database called ACS™ Service. Many DMS databases have a portion of address correct. Such as the address is 120 West Main Street, and the DMS has it as 120 Main Street; omitting the West from the address.  NCOA updates the address and then ACS fixes such inaccuracies as this. So it is important to do both, one after the other.

 Here is a link to the post office program for both of these:  https://www.usps.com/business/move-update.htm

3. Once all of this has been done, import the updated database into the DMS or CRM.

4. Then move onto email addresses. There are a number of independent services that can verify the validity of an e-mail address and acquire any that are missing from the database. These services can be used to fill in the blanks. Once this is done, then look for any that are still missing and have an admin call the customers to get updated information. Once this is accomplished, enter these changes into the DMS or CRM.

Whether the dealership chooses to do this internally, or to outsource to another company, usually depends on how messed up the database is, and the scope of work required. In some cases the database is not a huge task to clean up and dealers can do a very effective job themselves. Some, however, are so messed up that the task becomes overwhelming and it is better to seek outside help.

This problem starts from the top and goes down. It’s industry-wide and not just confined to dealerships. At PLG we once worked with an OEM who sent us a database of all dealerships and a list of their salespeople. This was a current list and yet we found that half of the salespeople weren’t even employed at the dealerships anymore. The tragedy in all this is that there is so much upside to knowing this data and having it clean. Look at grocery stores. They know what cat food you buy and use it to cross-market. If you’re a loyal Purina cat food customer and all of a sudden you start buying a new brand, I bet you that the cash register spits out a coupon for Purina cat food.

Dealerships have the ability to do this as well. If a customer has changed their oil with you for 6 years and all of a sudden stops coming in, you can encourage them to come back in with a relevant offer tailored specifically to that customer. This type of offer has proven time and again to be highly effective. The point is to have this customer data readily available and then use it to correctly target customers. However, most dealers aren’t doing this. I still get service reminders for vehicles I haven’t owned in 8 or 9 years. I recently bought a new vehicle and 2 weeks later I received an offer in the mail for new tires! It’s a new vehicle. Why would I need new tires? Sending irrelevant messages to your customers only alienates them and makes them less open to receiving and paying attention to future communications from you.

In part four of this series, we’ll explore what to do with the data after a dealer has obtained it and cleaned it up.