As ongoing inventory challenges continue on and OEM incentives dwindle, some dealers have considered pumping the brakes on their dealership marketing efforts.
But with shortages spurring fierce competition for customers and pre-owned acquisitions, proactive dealers are turning to new tools and technology to maximize the profitability of their sales and marketing efforts. In a recent industry survey, 91% of dealers who invested in training to support new technologies reported it made some level of positive financial impact.
Instead of taking a spray-and-pray approach, dealers who deploy a data-driven marketing strategy are empowered to maximize the efficiency and efficacy of their efforts, fueling dealership sales, pre-owned acquisitions and customer retention.
In this blog post, we outline three steps to develop a data-driven marketing strategy that works for your dealership – regardless of the size of your lot or staff – including:
1. Determine your needs and strategy
2. Commit to your specific approach
3. Create opportunities across portfolios
1. Determine Your Needs & Strategy
Dealership marketing strategies are as unique as the teams inside each dealership – there is no one-size-fits-all approach. While dealership size is certainly a major factor in developing your strategy, even similarly sized dealerships can have vastly different customer bases. The first step to developing a data-driven marketing strategy that works for your dealership is to determine the needs of your team and your market.
Start by assessing your dealership’s comprehensive performance at a high-level. Integrate data from your dealership’s tools, as well as factors like cost accounting, labor cost, inventory, pricing and more to analyze metrics like your per-sale profit and marketing ROI.
After assessing how your dealership is performing internally, your team needs to take an external look at your local market. Assess how your team is performing compared to your competition, benchmarking your results against the top 5-10 dealers in your market, as well as the top performers in your region.
As your team is uncovering where you stand, consider:
- who your customers are,
- what they expect from the experience of your dealership
- what sets you apart from the competition.
Here, it’s important to look to dealership marketing technology to understand your customers at a deeper level and develop a marketing strategy that reflects their unique wants and needs.
2. Commit to a Data-Driven Approach
While tactics have evolved over time, successful marketing always comes down to targeting the right customers with the right offer, in the right format, at the right time. To maximize the efficacy and efficiency of this process, dealers need to know their customers’ current preferences and accurately predict their next steps.
Traditional equity mining tools only tell half the story. Dealers need to commit to a data-driven approach at every step of the sales and marketing process, including investing in the right tools and technology. By leveraging tools like Mastermind that integrate with data from a dealership’s CRM and DMS, dealers can better understand customers at every stage of the buying cycle, fueling personalized outreach and beyond.
For example, when equipped with the right tools and technology, dealership teams are empowered to identify proactive opportunities to connect with customers before they re-enter the market. More specifically dealers can target customers nearing the end of the lease or warranty in the next 90 days.
By incorporating and assessing key factors like sociodemographic data, personal behaviors and buying preferences, these tools empower dealers to understand the motivating factors behind a customer’s vehicle purchase. These insights can be used to craft personalized messaging that guides their purchasing journey and maintain strong customer relationships after the sale through consistent, ongoing communication.
Download the Guide:
11-Point Marketing Checklist for Dealerships of Any Size
3. Identify Opportunities Across Portfolios
Finally, when developing a data-driven marketing strategy, dealers further maximize their efforts by identifying their best potential opportunities across their customer portfolios. As service loyalty drives sales loyalty, start by assessing your service customers.
Task your team to review scheduled service appointments for the next 3-5 days to identify and engage the best service-to-sales prospects before their appointment. Your team should be looking for key, data-driven identifiers when mining your service drive for sales opportunities. A good example of this is customers driving a vehicle that is out of warranty or over mileage or could benefit in pre-ordering a new product design.
Whether it’s emails about service specials, text messaging reminders on seasonal promotions or simple maintenance reminders, well-timed and personalized service notifications are also a great way to keep in consistent contact with loyalty customers to promote retention and generate ongoing service revenue. This is especially critical to consider as dealership and brand loyalty trend at historic lows.
On the flip side, decreased customer loyalty also provides dealers with the opportunity to conquest customers who may not have previously considered their brand or dealership. To win these net-new customers and stand out among the competition, dealers need to take a personalized approach, leveraging key customer insights to craft messaging that builds trust with buyers from the very first touchpoint.
Taking a similar approach using Mastermind’s Market Conquest feature, our dealer partners gain up to 15 incremental new conquest sales per month, on average.
With industry-wide inventory shortages expected to continue for the foreseeable future, it’s more important than ever that dealerships of all sizes continue engaging their customers to proactively promote customer retention and nurture future vehicle sales.
Remember: if you’re not communicating with your customer, your competition is.
To stay ahead of future challenges and achieve sustainable success, dealerships of all sizes need to develop a data-driven strategy tailored to their market, maximizing the opportunities available in their loyalty, service and conquest portfolios.