In today’s car-buying climate, the necessity to shift a new car off the lot has never been greater. New sales are now falling below expectations to 2015 levels despite generous incentives, while in the used market, the large numbers of vehicles coming back in for resale mean we’re seeing inventory depreciate twice as quick as in previous years. Under-pressure automotive dealers must have a better-than-ever strategy for moving inventory. But the old tactics, the ones dealers may have used the last time the auto market decelerated like this, suddenly don’t seem as valid as they once were. Traditionally, a dealer’s advertising spend would be through newspapers, TV, and radio, or would have paid to syndicate listings to third parties listing sites, in the hopes of reaching buyers who were already seeking out your type of model. For dealers, unlike customers who were required to self-select the cars they were interested in, it was all so passive and unpredictable.
Modern marketing technology is light years ahead, with advancements in data-driven technologies and artificial intelligence that help target prospective car buyers. But some dealers are still wedded to the old ways, and are finding this level of sophistication tough to grasp. The opportunities are three-fold, and dealers that are not looking closely at them may be leaving units on the showroom floor.
- Big data
Of course, dealers are used to holding data about their customers. But the advent of large-scale data storage and processing power is changing the game. By tapping customer data sources other than a dealer’s own, a dealer can gain a much rounder and more detailed view of the inner life of a consumer, and their place in the purchase lifecycle.
That can give new insights into marketing planning. For instance, while today’s equity mining tools are already helping dealers understand the optimum time after which to market a new model to an existing customer, Big Data can help us predict that, within 6 to 12 months of “mom” buying a car , “dad” might be in the market for a new truck.
- Smart segmentation
A customer is not a single person, nor even a single group. If he or she were, life would be as simple as crafting a single customer persona and targeting all marketing efforts toward it – a little like the old days. The truth is, many wildly different people may be interested in a vehicle, and many who fit the exact same demographic may be disposed toward very different cars.
You may think that a someone who reads Hunting & Fishing magazines and enjoys civil war history would be interested in a truck – but the difference between a white-collar customer who hunts on the weekends and one who needs a truck for his work every day has a stark impact on your marketing plan.
The key to knowing who to target is running that big, rich data through a data segmentation platform to create multiple different target groups, each with their own marketing plan. When you have groups that are small and tightly defined, you are more likely to achieve effectiveness.
- Artificial intelligence
The term “AI” already gets thrown around a lot, and get ready to hear it a lot more. In automotive digital marketing, a few leading technology companies have been quietly working to build “machine-learning” platforms that have already had a remarkable impact on campaign efficiencies and conversion outcomes. It’s a step-change in targeting technology that is quickly widening the divide between winners and losers online. A bit of advice: don’t fall behind this curve! But also beware, as with all revolutions in technology, there’s plenty of pretenders and a lot of loose talk.
The real players (and there are only a few) are ‘deep tech’ companies that have been building these technologies out for a while, with huge investments in data science. Do your research- it should become easy to pick them out from the herd.
Changing gear
The key shift modern dealers need to make is moving from passive marketing, to intelligent and highly-targeted messaging. If you are just blasting out your inventory details and waiting for interested buyers to find them, you’re missing sales out on the lot. In this market, dealers need to educate themselves about the inefficiencies of the old ways with the promise of the new intelligent AI techniques that can propel their businesses forward. Like all things technology, costs for the very-latest tools have come down a lot in the last couple of years – but dealers that remain locked to out-dated technology, devised for the marketing of a bygone era, will continue to use relatively inefficient tools that carry a relatively higher cost. I hope that dealers around the country can respond to the fast-changing situation by applying better advertising technology to reach customer with more relevant ads. Today’s advertising tools can help dealers accomplish this by automating and employing these capabilities, enabling dealers to get ahead of the competition and sell more cars.
