Today, most dealers spend heavily on purchased media—both traditional and digital—not because they want to, but because they have no other way to reach consumers.
Imagine if you knew every household in your primary market area (PMA). If you knew how to contact them, their media preferences and their vehicle and service needs, you would never have to purchase another television or radio ad again. You would simply engage in ongoing, meaningful dialogue with the few thousand households that drive your profits.
The fact is, the data you have in your customer database right now is more valuable than your real estate or your inventory. Unfortunately, most dealers don’t realize the value of customer data, nor do they allocate an annual budget for investing in their most valuable asset.
If you can master this, it’s reasonable to expect you can significantly slash your marketing budget while increasing your gross revenue 40 percent. But recognizing the value in data isn’t enough; you also need a strategy to capture and utilize data. Here are some guidelines.
Decide What is Valuable
The total number of records in your database means nothing unless you know who they represent, how to contact them and what their needs are. You can never know too much, so set a goal to acquire as much data as possible. Start by answering these questions:
How many households are in your PMA? This number can be obtained from records from the U.S. Census Bureau.
What is the percentage of households in your PMA that you can contact right now?
At a minimum, you want contact information for 90 percent, but ideally 100 percent of those homes.
Next, acquire the following data. It’s important to gather this information on all households so that you can identify and infer which households are the most valuable customers to target.
Must-have data includes:
- Physical address
- Phone number
- Email address
- Income range
- Media preferences: Where they get their news, are they on Facebook or Instagram, do they respond to snail mail, emails or texts?
- Vehicles owned including year, make, model
- Interests and hobbies: Do they like roof racks because they like to cycle, mud flaps because they like to four-wheel, or a premium sound system because they’re an audiophile?
- Shopping habits: Do they value quality and service (Nordstrom) or price (Wal-Mart)?
- Number and ages of children:
- Birth dates:
- Affiliations: Charitable organizations, volunteer groups.
Ascribe Value to Your Data
Dealers have always struggled with having salespeople and service advisors collect email addresses. The primary reason employees aren’t held accountable is because they, and dealers, don’t know what the data is worth.
Would it make a difference if you knew that every email address was worth $10? How about $20? $50? Is a phone number worth more or less than an email address? We know that the second form of contact is worth significantly more than a birth date.
It’s important to ascribe value to your customer data so you can establish a benchmark, set a goal for improvement and keep staff accountable for collection efforts.
First, create a spreadsheet. Each row is a customer record, including households in your PMA not in your database. Mark these as “unknown.” At the head of each column is a data element; include all must-have and nice-to-have elements. Now, assign a dollar value to every data element.
It doesn’t matter if the value you initially assign to a data element is correct. Start somewhere, even if it’s arbitrary. In time, you will recognize the relationships between data elements and customer responsiveness; and you can adjust values accordingly.
The next step is to calculate the maximum potential score for your database; that is if every element in every row was filled in. Then, calculate a score for the data that you currently have. What is the difference? Prepare to be shocked at how little you know about the households in your PMA.
However, your goal is not to achieve a perfect score of 100 percent, but to continuously improve your score, thereby increasing the value of your database every year. Recognize that data is a depreciating asset, therefore some effort is required just to maintain the status quo.
To build the value of your database, collect data via the following methods:
- Quarterly appending
- Third-party leads
- Experian vehicle registration
- Curate new and lookalike audiences on social media and Google properties
- Invest in community events and outreach
- Leverage manufacturer programs to partner with local organizations and schools
- Invest in conquest campaigns
- Incent staff for most data collected
Your database is more than a receptacle for customer records. It’s a strategic asset that can be used to identify and communicate directly with the most valuable customers in your PMA, which in turn will significantly boost your gross revenue and profits.