How Predictive Analytics are Impacting OEMs and Dealerships
From OEMs to dealerships, predictive analytics tools are revolutionizing the automotive brand experience for consumers. Simply put, these tools analyze trends and data from the past, along with what’s currently happening, to predict what is most likely to happen in the future.
Across a growing range of industries, predictive analytics drive things like auto insurance rates, sports team strategies, airline ticket prices, YouTube video suggestions, how much your rideshare trip will cost and much more.
From an automotive retail perspective, dealers can use predictive tools to inform decisions related to inventory, merchandising, pricing and more, resulting in improved efficiency and efficacy to pave the way to greater ROI.
When fueled by high-quality, relevant data, predictive marketing software can generate insights that empower brands to intelligently identify, engage, convert and retain more customers. With 80% of dealerships expecting a future change in the way business is being done away from the traditional approach, these tools offer dealers an especially valuable opportunity to look ahead and proactively plan for success.
In this post, we’ll share how predictive analytics empower automotive OEMs and dealers to adapt and evolve and innovate, including:
- Upending the traditional sales lead “quality versus quantity” model
- Revolutionizing marketing and dramatically redefining the ROI equation through personalized marketing
- Providing the necessary insights to win and keep customer loyalty
How Predictive Analytics Benefits the Sales Lead Equation
We’ve previously explained how predictive analytics have upended the traditional balancing between quality and quantity for automotive sales leads.
Predictive analytics lead scoring tools like Market EyeQ combine customer insights from dealers’ CMS and DMS, as well as demographic, historical and financial data from third-party data partners such as IHS Markit, TransUnion and CARFAX in a single environment. From here, Market EyeQ automates the process of sifting through leads by leveraging predictive analytics to assess each household in a dealer’s market and identify which customers are most likely to buy.
Instead of a stack of leads, sales and marketing teams receive an actionable assessment of customers ranked on a 0-100 scale according to Market EyeQ’s Behavior Prediction Score®, along with the actionable insights explaining exactly what went into that prospect’s ranking.
This predictive analytics lead generation approach empowers sales teams to make the most of their leads by focusing their time and efforts on their best opportunities. As a result, dealers who leverage Market EyeQ’s Market Conquest gain up to 15 incremental new conquest sales a month.
Revolutionizing Marketing ROI with Predictive Analytics
To understand the power of customer-centric marketing powered by predictive analytics, look no further than one of the standard-bearers of analytics in business: Amazon.
Amazon is famous for its “obsession,” as founder Jeff Bezos calls it, with customer service – and dealers know how much customer service impacts sales. Amazon’s focus on customer service is rooted in its use of predictive analytics and intelligent, personalized marketing. The company’s predictive marketing is critical to its success, with research finding 73% of regular online shoppers had clicked on a personalized Amazon product ad – 83% of which converted to buyers.
For automotive OEMs and dealers, results like these come from connecting customer insights, just as Amazon does, with high-quality third-party data to automatically identify consumers who are predicted to be in the market for a vehicle – along with those who may not be shopping yet, but are predicted to enter the market soon. Predictive marketing software like Market EyeQ automatically engage these high-potential buyers when they are most likely to respond with personalized messaging designed to shorten the length of the sales cycle.
By deploying this type of low-touch marketing, Mastermind’s Market EyeQ sales platform lowers dealers’ cost-per-sale by an average of 80% and generates up to 15x ROI.
Changing the customer relationship
In the modern automotive environment, brand loyalty is largely dictated by a customer’s experience – and knowing what customers want. Research from Mintel found 44% of U.S. automotive consumers were looking to change automotive brands on their next purchase, with 53% citing their needs not being met as a reason for defection.
Predictive analytics tools often generate insights that empower brands to rethink what “everyone knows” about what matters to consumers. For instance, analytics-powered research conducted by IHS Markit for Toyota found that the strongest driver of automotive brand loyalty was, of all things, collision repair orders. Meanwhile warranty repair orders – commonly considered an important customer service touchpoint by dealers and OEMs alike – had no impact on brand loyalty. These findings, in part, lead the automaker to expand its certified collision program.
At a dealership level, it’s insights like these from predictive analytics tools that provide real opportunities to proactively build the kind of customer experience-driven loyalty that is so important to a dealer’s bottom line.
Simply knowing what factors are impacting customer loyalty is only half of the equation. You still need the tools and high-quality customer data to leverage those insights in an efficient and meaningful way. According to Microsoft, more than 75% of consumers expect customer service representatives to have visibility into previous interactions and purchases, and 70% expect you to know their contact, product and service information and history in front of them – regardless of the channel.
Market EyeQ’s intelligent behavior prediction modeling algorithms empower dealers to do just this. By both identifying which customers are ready to re-enter the sales cycle and generating personalized messaging based on the specific factors predicted to influence their purchasing decision, our dealer partners are able to deliver an exceptional customer experience – and increase retention up to 15%.
If you’re interested in learning more about what predictive car dealership analytics tools can do to revolutionize your dealership’s sales, marketing, customer relationships and much more, contact us for a free demo.