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How Predictive Marketing Drives Dealership Customer Retention

Dealers know the ability to provide customers with the best possible experience at your dealership is a component vital to the success of your business. But did you know customer service can be maintained and enhanced through predictive marketing processes as technology advances?

As new vehicle inventory challenges threaten customer loyalty and evolving digital retailing options change consumer expectations, predictive marketing is an increasingly important tool for dealers. It allows dealerships to stay ahead of prospective buyers’ demands to deliver an excellent customer experience. 

Utilizing this advanced technology serves lasting potential to improve your dealership’s operations across the board. Dealers who leverage Mastermind, for example, on average increase their retention by up to 15%.

What is Predictive Marketing?

Predictive marketing tools for dealerships automatically aggregate and evaluate customer insights. These insights are found from: 

  • First-party data from a dealer’s CRM, DMS and equity mining tools
  • Third-party data from public and proprietary sources

While they were once considered too costly to implement, many dealerships are leveraging predictive marketing tools like Mastermind. These tools are used to identify sales and retention opportunities in their CRM and DMS they may have otherwise missed. This enables dealers to identify customers preparing to return to market, before they start shopping around.  

Predictive marketing improves the customer experience by empowering dealers to understand the motivating factors behind each customer’s next purchase. By doing this, dealers are able to proactively prevent customer defection. The more your team understands the wants, needs and behavior of your customers, the better they are at tailoring their messaging and sales strategy for each customer.

Download the Whitepaper:
Predictive Marketing for Dealerships 101

Why is Predictive Marketing Important to Car Sales?

For dealerships to retain their customer base, it’s critical to build goodwill.  This goodwill can be built by delivering personalized, informational and consistent messaging that demonstrates why they should trust you and your dealership. According to a recent study, 91% of consumers said “trust” was important to them when deciding which dealership to purchase from.

Personalized messaging is key to building trust with buyers, avoiding spray-and-pray marketing. In fact, in a 2022 industry study, 40% of consumers say they didn’t contact the dealership in their research process because the dealer didn’t include special offers in their marketing messaging.

The auto industry has long relied on bringing in new customers through traditional marketing strategies like television, radio and print media. However, these advertising mediums are losing their effectiveness as audiences become inundated with content every day. Predictive analytics are perfectly suited to help dealerships overcome this challenge by creating personalized messaging that is hyper targeted and delivered to the right customers.

Predictive marketing technology enables dealers to proactively promote customer retention by automatically engaging loyalty customers preparing to return to market with personalized messaging such as extended lease offers or timely service reminders designed to retain their business and reduce churn. 

From the customer’s perspective, predictive marketing technology means more informed, relevant and efficient sales conversations with dealership personnel. When powered by predictive technology, every touchpoint can build off the last, reducing the overall transaction time and improving the customer experience.

How Can Dealerships Maintain Automotive Customer Retention Strategies?

As loyalty diminishes amid inventory challenges, it’s more important than ever that dealers stay top-of-mind with buyers by engaging loyal customers with the right messaging, at the right time and in the right format. However, in a sea of offers from competitors and a growing number of online-only retailers, dealers need to look at all their opportunities to build trust with buyers.

The service department presents the perfect opportunity to regularly engage loyalty customers communications when aided by predictive marketing technology. According to data from Mastermind, customers who service at the dealership are 2.5x more likely to purchase their next vehicle at the same retailer.

With marketing technology and predictive analytics, dealers can automatically send tailored service communications like emails about service specials, text messaging reminders on seasonal promotions or even simple maintenance reminder calls.

This specific strategy is becoming even more valuable as the average age of vehicles on the road reaches a new all-time high at 12.2 years, according to S&P Global Mobility. As ongoing inventory shortages linger on, more customers are holding onto their vehicles longer than ever, giving dealers a prime opportunity to leverage predictive marketing to fuel their service messaging to support customer retention.

How Does Predictive Marketing Serve Customers?

Predictive marketing serves customers by helping alleviate some of their greatest dealership pains. In a recent industry survey, “time spent at the dealership” was ranked as the customer’s top point of frustration at the dealership.

Predictive marketing helps dealerships improve the efficiency and efficacy of their marketing efforts by automating tedious and manual processes such as: 

  • Sifting through leads 
  • Targeting the best prospective customers 
  • Delivering personalized messaging at-scale

Equipping every department from sales to F&I to service with information is key to dealership efficiency and success. Predictive analytics improve the dealership customer experience by centralizing customer insights dealership-wide. This empowers teams to connect the dots between departments and unify their approach to improve the efficiency of their efforts. Taking a similar approach with Mastermind, our dealer partners report generating up to 15x marketing ROI.

Download the Whitepaper:
Predictive Marketing for Dealerships 201


How can dealers use predictive marketing to enhance customer loyalty?

Predictive marketing tools empower dealers to stay a step ahead of customers returning to market. It  identifies which customers are preparing to return to market based on thousands of data points ranging from geographic targeting to behavioral tendencies based on social media insights. With these insights, dealership sales teams can create more proactive customer retention plans, personalized messaging and optimize sales presentations.

As the market changes constantly, it’s more important than ever dealers take this sort of proactive approach to improving the customer experience and building customer loyalty. By powering your internal and external processes with predictive analytics, dealers are empowered to deliver an enhanced customer experience that’s bound to increase your dealership’s CSI.

Interested in learning how automotiveMastermind can help your dealership leverage predictive marketing technology? Contact us for a free demo.