Dealers are used to hearing that a good CRM system is all they need, and when considering spending money on anything else, “Why bother? We already do that.”

The truth is CRM systems would need to expand functionality significantly to make the case to dealers that they can do all the things a good AI-driven Marketing Automation tool can do.

This article will explain why a CRM system, no matter how good or multi-functioned, is not the same as Marketing Automation driven by Artificial Intelligence. A CRM system, no matter how capable, does not drive the same increase in brand or dealer retention, service retention, or customer value that an effective AI-driven Marketing Automation tool can provide. Further, this article will make a case for reducing the functionality (and cost) of most automotive CRM systems and focusing them only on what they do well.

As we cite the evidence proving why CRM is not enough, we will define what a good AI-driven Marketing Automation system really does.

1. CRM’s don’t do real AI. As an example, most CRM systems do not track the way customers view message content or subsequent online behavior. Effective AI consumes a great volume of customer shopping behavior and transactional data in real time through predictive models, technology processes, and actual science, providing real insights that inform future communications. These insights help define the when, where, and how a message is delivered, and what the offer should be. CRM systems simply do not have access to the diverse data, nor the processing power needed to drive true AI-driven messaging or automation. 
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3. CRM’s do not have large or flexible content management systems (CMS) for personalized messages. True AI-driven Marketing Automation delivers a high degree of smart personalization. This means that based on AI and online behavior, a marketing automation system essentially creates a personal stream of communication, tailored to each consumer. Personal means the time of the message, the media channel through which it is delivered, and most of all, the content of the message is unique. AI automatically integrates a service message into a sales offer, based on where the customer is in their purchase cycle. It also automatically varies the message delivered through email from Facebook and/or Direct Mail. This degree of personalization is beyond the scope of CRM systems. Sure, they can deliver a couple versions of a similar message, but that is not real personalization – the kind that drives better results.
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5. CRM data is not very predictive of past or future behavior. Over the years, virtually every company that has tried to use CRM data to make statistically solid predictions has been left disappointed. Simply, the inconsistent entry of data and manipulation of the same data leaves it almost useless for analysis. It does not predict future sales. It does not explain past sales. Also, data used to help drive compensation and/or performance reports does not enable predictions. It’s good to help see who visited (although Google has that now) and to help drive the first few contacts when a lead arrives. Beyond that, the data is essentially useless and, frankly, not worth collecting.
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7. CRM systems are not omni-channel or sophisticated delivery engines. While most CRM systems can deliver email, or manifest lists that can be used for Direct Mail, they do not automate the decision process on which channel will work best. Most do not deliver messages to Facebook or other social media platforms. Appending email to customer records often suppresses email delivery. In some CRM systems, personalized email (from lead follow-up) is delivered on the same system as bulk email. As recent as the last two years, a very large CRM system found itself unable to deliver email at all. How did they solve this? They bolted on to a marketing automation system to deliver their messages.

If you are tempted to use your CRM system to drive your communications, take a look at the number of decisions that need to be made to deliver just one of the hundreds of messages that need to be delivered over a single consumer’s lifecycle. Ask yourself if your CRM system makes these decisions. Ask yourself if you want your salespeople or BDC to make these decisions. Oh sure, many of them do that very well, but they do not do it as well as the science used in today’s AI-driven Marketing Automation systems that are informed by millions of transactions every single day. 

With the profit in sales and service, do you want to take that risk?

A study by Outsell, Experian, and RXA looked at 960 dealerships and over 6 million sales and found that Outsell’s AI-driven Marketing Automation platform drove a 26% lift in dealer retention, a 31% lift in service visits, a 24% lift in OEM brand retention, and across 3 years, resulted in $472 more gross profit for each customer. The profit potential of better retention overwhelms anything that might be saved by using CRM for what marketing automation should do.

What Is Virtual Customer Engagement and Why Does it Matter?

For a few years now, you have been hearing that the way to build loyalty for dealerships and brands is to create real Customer Engagement. Now you are starting to hear that Customer Engagement might not be enough. Today we need Virtual Customer Engagement.

What is Virtual Customer Engagement? Is it just another buzz phrase that marketers invented to make their normal marketing seem more relevant? All worthy topics. One can make the case about why both Customer Engagement and Virtual Customer Engagement matter to dealerships.

Customer Engagement – What Does It Mean?

Loyalty to a dealer is not a transaction. It is not a discount structure. It is not a reward program where the 10th oil change is free. Transactional loyalty is a coincidence. It means a retailer got lucky when a customer needed to buy or service something.

Carl Sewell once said of creating loyalty and engagement that, “The easiest way to set the right tone is to think of your business as your home. You are inviting friends and neighbors in. You want them to feel comfortable.” 

How do you engage with your friends? You share stories. You get together with them with no agenda. You help them when you can, because you can. Your relationship has been built on mutual engagement. Engagement – sharing of important, relevant information and experiences among different parties – that has built a mutual sense of trust.

How do you build engagement with customers in a dealership? The same way you build a friendship. You share relevant, timely information that helps your customers enjoy their vehicle more. You provide services when they are needed, sometimes even before the customer knows they need them. You take actions, make recommendations, and provide tools and information that are in the best interest of your customers, trusting that they will also be in the dealerships’ best interest.

This engagement in turn builds loyalty in both sales and service.

A 2019 study that Outsell conducted with RXA and Experian looked at the results of increased engagement across thousands of dealerships and millions of transactions. The study showed that more engagement through consumer lifecycle marketing results in more OEM brand loyalty, more repurchases from the dealership, more service transactions, and more gross profit over a three-year time period. Building engagement leads to better business performance – just like Mr. Sewell wrote about 20 years ago.

Virtual Customer Engagement – Why the Pivot?

We are told that now we need to move to “Virtual” Customer Engagement. What is it and why the pivot? In the past, dealerships and other retailers have been able to demonstrate their character and trustworthiness in person, through face-to-face, direct 1:1 communication. Kind words, a ride home, help with pairing your mom’s cell phone to your mom’s car are all examples of how trust is built through live engagement. A satisfactory sales experience that shows you how to upgrade for the same payment or a service repair that prevents a big breakdown are all examples of useful, proactive personal engagement that help to build trust.

As we have moved to less 1:1 engagement and are taking advantage of more remote processes and transactions, retailers and dealerships are challenged to build engagement in a different way, a more “virtual” way.

Virtual Customer Engagement means that dealerships need to build affinity, trust, and the resulting loyalty by demonstrating their character and integrity without depending on face-to-face contact. This does not mean that there is no face-to-face contact, but it does suggest there is less of it. It means that information, the currency of trust, must be provided clearly, openly, and immediately, even proactively when possible, wherever a consumer might glean it.

Gone should be the days or circling a C-130 over a 10-mile radius around the dealership and dumping leaflets with a scratch off or a special key. Gone should be the days of advertising and marketing messages that give enough information to be compliant with the law but are largely deceptive with “mouse type” that basically invalidates the offer. Gone should be the hooks that ask customers to give up something to get basic, readily available data like price or trade value.

These tactics do not build engagement. The personal contact that sometimes (although not very often) helped counter the damage done by these tactics are less frequent and cannot be depended on to create loyalty and retention.

Dealers need to look at their message system and ask: If this is the only way someone judged my trustworthiness, would I trust me?

Look critically at communications, considering frequency and offers, and use your own experience as a guide. Consolidate your communication on platforms that use Artificial Intelligence (AI) to guide what to say to whom and when. Consolidate your marketing communication solutions to focus on building engagement virtually, in addition to your face-to-face contacts, and through partners that recognize one channel is not enough. Omnichannel marketing is as essential today as Virtual Customer Engagement is essential to retaining today’s customers and attracting tomorrow’s.

One of the big advantages of digital retailing driven by Artificial Intelligence (AI) is that it uses behavior to identify which consumers are likely “in market” and serves up individualized content to engage them. Once engaged, interested consumers who want to go further are sent to the dealer website to continue the shopping process.

Most shoppers rely on the information they see online, but what if they relied on the Dealer’s website as the only source of information before making a purchase decision?

Consider the data from the 2019 Cox Automotive Car Buyer Journey Study (April 2019):

- Buyers now spend 13.55 hours researching their next vehicle purchase

- 61% of that time is spent online

- 46% use the dealer web site

- Shoppers visit an average of 4.2 sites

- Shoppers visit an average of 2.3 dealers

- 29% found the information to select their vehicle online. This information was the third most important source in the decision, right behind getting the value of their trade-in.

Now, ask yourself, if your website was the only place shoppers got their information, would they….”

1. …understand what makes your dealership unique and better than others they visit?
2. …know the most current OEM National and Regional incentives they are eligible for?
3. ...see the additional specials and offers that only you provide?
4. …understand the different ways they can shop or buy from you?
5. …understand the service options you have and the products you offer? This means tires, quick-service, pickup and delivery, and any other unique customer centric options.

For the last few years, experts have convinced the auto industry that all a shopper wants to see is inventory and price. Many dealer websites have been scaled down to vehicles, coupons, and a variety of other buttons that are supposed to drive clicks and sales.

Most sites also lack any real brand attributes that matter to consumers or unique options and services that provide a reason to choose one store over another. The current strategy leads to a commoditization of dealerships that completely devalues brand – and that is a mistake.

Go back to the questions above and ask your friends and family to answer them after visiting your dealer website. If they can’t, then you know where to focus your efforts toward updating your site for better digital retailing.

These simple low-cost recommendations can help you see your website as if it was the only place a prospect visited and the only information they saw before deciding to shop or visit your store.

Direct Mail Etiquette During a Crisis

Virtual Customer Engagement is shaping the auto industry for the years ahead, leading many to turn toward rethinking their websites, email marketing, and social media.

Now is not the time to stop communicating with customers and prospects. A virtual customer experience is important, and one form of traditional media should also not be overlooked.

Direct mail.

Target Marketing recently reported that “the WHO (World Health Organization) and CDC (Center for Disease Control) both say no coronavirus transmission has occurred from a newspaper, magazine, letter, or package. Sending your mail pieces to customers and prospects is still considered safe.”

It’s also springtime and many people are getting outside as often as possible to help alleviate some of the stress of “Stay at Home” orders and social distancing. One thing we’re almost all still doing? Getting the mail, especially if it encourages going out for a walk.

But direct mail pieces, like all messaging during this time, cannot be business as usual or tasteless just to bring in sales. There are ethics to be considered and etiquette to follow that can be inoffensive while still effective.

Don’t waste money sending the same generic mailer to everyone in your database.

We know it’s the way you’ve always done things, because more mailers mean more chance for success, right? Not now, when your marketing dollars are more precious than ever.

Individualization is key for better response rates, as well as cost saving if you only send mailers to those likely to convert. Your data is your most valuable resource, and the right tools can use your data to determine who is in market to purchase or service and which channel they are most likely to respond to—including direct mail.

Don’t make the message about you, especially if you reference COVID-19.

Your messaging should be about the customer. What you might have done as a clever marketing ploy before is no longer appropriate—like one dealer learned the hard way after stamping “COVID-19 stimulus assistance” on their mailers.

What is resonating with consumers is genuine empathy. People still need vehicles, and they still need to service the ones they have, so put your specials front and center and show that you are here to help. And consider moving on from COVID-19 as the messaging around it is fatiguing consumers by as much as 50% according to recent studies.

Don’t use humor that might get lost in translation in print.

We could all use more levity right now, and humor doesn’t have to be tasteless even during a pandemic, but what might be funny in a commercial or video can get lost as written words, the same way tone and sarcasm cannot be conveyed well over email.

Make your messaging about the customer – caring and sympathetic while offering specials and drop-off purchase and service options that appeal to everyone’s needs and concerns right now.

Most importantly, pay attention to the little things that we used to take for granted—like using images of people touching or in groups—and make it clear that you are not trying to capitalize on a crisis; you’re informing consumers about the changes you’ve made recently to your dealership and providing offers to make their purchase and service experiences easier and safer.

Like you, Outsell puts our customers first and is working to help our customers during this difficult time. Learn how to effectively utilize your marketing budget by smartly targeting in-market shoppers and servicers with A.I.-driven Direct Mail campaigns.

About Outsell

Outsell offers the only Virtual Customer Engagement platform for the automotive industry, creating an individualized consumer experience through AI-driven marketing automation that drives increased profits across sales and service. Our proprietary technology harnesses massive amounts of data creating accurate and powerful consumer profiles that engage your customers and prospects exactly where they are in their individual lifecycles. That’s why Outsell is the trusted platform for over 1,500 dealers representing all major automotive brands. To learn more, visit https://www.outsell.com/ or follow us at @Outsell.

Working backwards:

3rd Party Data: Purchased data acquired from large data brokers like Experian and Acxiom.

2nd Party Data: Less commonly known, this is another company’s first-party data put up for sale, (which is becoming more and more frowned upon).

1st Party Data: Your CRM, DMS, and data you’ve collected from website visitors, social media followers, email subscribers, etc.

Introducing a type of data you might not be familiar with:

• Zero Party Data: Data a customer intentionally and proactively shares with you, implying explicit interest and preferences for how a brand should communicate with them.

The American Marketing Association (AMA) recently reported that “Quite a few forces are converging to squash third-party data. Foremost is consumer concern around personal data and privacy.” This comes as little surprise, but also doesn’t have to be a bad thing.

Simply put, 3rd party data isn’t accurate enough in the age of hyper-personalization. That’s where 1st party data comes in, but it, too, can suffer from inaccuracies.

To avoid this, one option to help create a stronger 1st party database is through incentives, offering something valuable in return for consumers providing personal data. Or rather, the targeted offers and loyalty programs of the world. Consumers will tell you what you want to know to better market to their needs as long as they get something out of it besides a sales pitch.

Where Zero Party Data begins to play a larger role is through deeper questions of perceived value, and more importantly, consent.

The CCPA, or California Consumer Privacy Act, which became active on January 1 of this year, has created new consumer rights relating to the access to, deletion of, and sharing of personal information collected by businesses – which basically covers everything.

EXCEPT Zero Party Data, which is already automatically compliant because it is a consumer willingly telling you what about them you can use to market to them and how.

Forrester recently said that “While brands might historically have considered this self-reported data to be ‘first party,’ consumer expectations have forced the need for a new term and a new way of treating this kind of personal information.”

Consumers expect more control over their data, and Zero Party Data is their way of requesting better personalization and rewards.

So, how can dealers capitalize on this trend? Provide what consumers expect – personalization, preference control, and ways of communicating that with you. Even before someone fills out a form, you can use the data you have – 3rd, 2nd, and most importantly, 1st – to begin building the foundation that provides consumers with what they want.

When you communicate regularly based on consumers’ intrinsic needs and interests, they’re more likely to engage and share additional information, further building their consumer profile so that your marketing efforts are more personalized, more in line with what they want, and more successful at converting them and keeping them as customers.

How are you making the most of your data when it matters most?

By Valerie Vallancourt, VP of Marketing at Outsell

In November, Outsell announced the results of a comprehensive, multi-year data study conducted with RXA and Experian. The study encompassed 5.6M consumer relationships across 960 dealers, and 18.7 million vehicle transactions - leveraging data from Experian’s Auto Response Analysis on 2.5 million sales and 16.2 million service visits over a three-and-a-half year period. It examined the effect that AI-driven marketing has on customer loyalty, repeat business and service visits, and calculated the incremental lifetime value of customers due to AI-driven lifecycle marketing.

The study found that engaging a customer with AI-driven lifecycle marketing results in:

• 65% higher odds of that customer repurchasing at the same dealer
• A 25% increase in service visits over three years

• $427 in incremental profit per customer

The study confirmed what Outsell has been telling dealers for years: that AI-driven lifecycle marketing improves customer engagement, revenue and profitability. This is the clearest picture we’ve seen yet of the impact that AI-driven lifecycle marketing has on the Automotive consumer at every stage of the buying cycle. This concept is particularly important now, when auto sales are softening and dealers are looking for ways to increase retention, boost service and profitability.

When most people hear the term “AI-driven marketing,” they may think of clumsy robotic systems that spam out awkward mass email blasts. (Or maybe they think of HAL from the film “2001: A Space Odyssey.” That’s definitely not it.)

AI-driven marketing for auto dealers means using computer algorithms to scale targeted, automated campaigns to reach more people. It’s like your best salesperson, inside software, carefully crafting messages that market to people as human beings and reach them at just the right moment and at the right cadence to be the most helpful.  

It remembers everything about a customer and every transaction: when they bought or leased, when they had service, how they felt about it, and much more. It knows what’s most useful to people. And it learns how they like to be spoken to and how often. It engages people with messaging crafted by highly skilled experts. Over time, it becomes more helpful to each consumer, because the messages and offers become even more personalized and refined.

Common dealer objections to using AI-driven marketing include:

• Complexity: While this may sound complicated, software tailor made for auto dealers actually makes it very easy, masking the complexity and doing most of the heavy lifting.

• Staff: Some owners and managers believe that their staff will object to this approach. We’ve found that any concerns quickly dissipate when salespeople see the quality of engagement and the leads that come in from AI-driven campaigns. Within days, salespeople are typically clamoring for their new ‘most-likely buyers’ reports.
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• Cost: The ROI on this approach has now been proven. What other technology does your dealership use that’s resulting in an incremental profit of $427 per customer? My guess is none.

So what’s holding you back? Put AI-driven marketing on your list of New Year’s Resolutions for 2020.

As we cross the threshold from the second wave of the internet into the third, every dealer has a website, most have mobile/responsive websites, and email marketing is becoming the norm in the automotive industry.

More sophisticated automotive marketers are segmenting email campaigns, just as they did with direct mail in the past. Targeting is getting better every day, raising response and conversion rates to escape being flagged as ‘spam’. But with the third wave of the internet upon us, automotive marketing is headed for a seismic shift.

Optimally targeting your campaigns, refining your content, and putting the focus on data are paramount to every dealer’s success in 2017, especially with email marketing.

A recent article on DrivingSales from CopyHook founder Steve Shaw pointed out three of the most common errors seen in email marketing, reminding us that “…sending a bad email can be worse than sending no email at all.”

How dealers market to consumers is becoming analytics driven, individualized, automated and dynamic. Online and offline behaviors are merging into one – just ‘behavior’ – and automotive marketers can track all of it to customize sales and marketing accordingly. Data and advanced analytics are helping dealers nationwide deliver relevant information to car buyers before they even know they want it.

Shaw’s article covers the need for clear calls-to-action in email marketing, with engaging subject lines, and concise, tailored content. An effective call-to-action should be dynamically tailored to each individual so it’s a call-to-action they care about, and having a personalized subject line is part of that experience.

Your customers expect you to know them, they expect personalization, which is why it’s alarming that 70% of brands don’t personalize their emails1, especially when personalized subject lines can increase open rates by up to 26%2.

Shaw’s third point about not being long-winded comes down to refining your messaging. The more someone has to scroll, especially if they’re looking on a mobile device, the less likely they are to stay engaged with content further down.

Effective email campaigns should be:

• Automated and dynamic
• Triggered as a result of behavior
• Individually tailored
• Concise and relevant

Don’t get left behind in the second wave of the internet while your competition jumps into the third. Engage consumers with email marketing that works and avoid the common pitfalls that can be easily avoided by making data and personalization your secret weapon. 

1. ”70% of Brands and Marketers Aren’t Doing This…” Zembula. July 15, 2016.
2. “The Rules of Email Marketing.” Campaign Monitor. 2015.