Trying to understand who your best target customers are can be a painfully long, and expensive, process that can result in thousands of wasted marketing dollars and time. In order to be top-of-mind with the right consumer, a marketing strategy needs to be in place in order to reach your next vehicle sale. Since the introduction of data-driven marketing, dealers have learned the benefit that online marketing can play with their overall sales goals. But is there more that we can do?
Predictive analytics, which up until now have been mostly utilized by enterprises in the financial services, insurance, telecommunications and healthcare space (to name a few), is a marketing strategy that should be considered when evaluating your digital marketing efforts. The reality of gazing into a crystal ball and foreseeing your next customer can become a reality with the proper processes in place. Allow me to explain.
Predictive Analytics 101
In the simplest terms, predictive analytics is the ability to use data points to zero in on customer behavior, and where someone is in the buying cycle; tailoring and distributing unique offers that apply to their buying interests – regardless of where they are shopping. Once you have identified who is actively shopping, a personalized marketing campaign is shared with this consumer in order to create interest and consideration for their next vehicle purchase at your dealership.
With the average consumer spending 11 hours per day online, data trails may be found everywhere. Combine that data with other public and private offline sources, and there is a wealth of information available about most Americans. Leveraging data algorithm technology, you can analyze these thousands of buyer attributes in order to zero in on who constitutes a worthy marketing investment. This abundance of data is evaluated and ranked to determine a “propensity to buy” score, which is used to narrow the buyer selection pool. Information scrutinized includes, but is not limited to:
- Household make up
- Vehicle loan details
- Financial score models
- Brand loyalty
- Lifestyle indicators
- Marital status
- Income level
This extensive insight empowers you to identify the top 20 to 30 percent of potential buyers, within a specific radius of your dealership, who demonstrate characteristics of actively shopping for a new vehicle within–a four to six month timeframe.
There is, however, a key difference with predictive analytics versus other types of data-driven marketing. Many data-driven campaigns go after “look-alikes”. This means that they profile the demographics of your current buyers, and then try to market to people with the same characteristics. For example, all people who make more than $100K and live in wealthy zip codes should buy a Mercedes. This is not Predictive Analytics. You would still waste marketing effort on people who aren’t in the market. Predictive Analytics may use demographics in the algorithm, but it also uses additional data such as financial, historical behavior, life events and online behavior to predict who is actually shopping, and ready to buy–versus just identifying people similar to others who have purchased your product.
By identifying this specific pool of buyers, you can customize personal marketing offers that will entice customers to visit your dealership, thus enabling your sales team to have a higher probability of capturing a new sale. Don’t limit your marketing exposure. Instead, leverage as many touch points as possible from retargeting, online advertising, and social media to direct mail, email marketing and SMS push notifications. The more interaction you have, the more opportunity you will have to be considered top of mind among your customers.
Combining a little bit of science and a little bit of tenacity, your ‘crystal ball’ will help you gain access to a larger consumer base that you may not have previously been actively pursuing.