5 Effective Data Strategies to Use in 2023
Every dealer in today’s times knows the importance and value of your data. However, not every dealer understands that your data needs a consistent top to bottom strategy behind it, especially in 2023 as consumers’ preferences and behaviors demand personalized experiences, even when being marketed to. But the big question is, how effectively and efficiently are you using the data that you have access to?
Whether you were a data champion, or have taken more of a reactive approach previously, now is the time to re-evaluate if you are utilizing all the data available to you to make the best buying and selling decisions for the upcoming year.
Data isn’t just a thing.
Data can, and should, represent many important things to a dealer’s marketing goals. Data represents audiences and shoppers. Data is destinations and provides the ability to target. Data can be used to sell and elevate both your brand and the experiences your dealership offers to stand out from your competition. Data provides dealers with the foundation for success.
Data isn’t just a thing anymore.
Data is, and means, much more to the modern dealership these days.
And when you have a strategy around leveraging your existing data, as well as new 3rd party data every single day to make your marketing investments wisely and reach high funnel shoppers, data means higher profits and gross revenue.
Below find the top 5 strategies you can implement in the coming year to effectively and efficiently use your data to build a marketing plan that can help you capture more leads and drive more profits.
Strategy 1: Organize and Activate Your Existing Data
How can you make your data more effective and efficient, especially if driving more business and quality leads is one of your dealership’s top goals for the coming year? In addition to your 3rd Party data, you should start by organizing and activating your existing data – the first-party data you already have worked hard to build.
Whether that data lives in your sales or service databases, you most likely not only need to clean it up, update it, and organize it… but you also need to start activating it. Following find some practical examples on how auto dealers finding success are doing this in order to retain or recapture clients:
Lease Customers: You know when your lease customer will be coming off lease, and when that time comes, there might still be inventory challenges or a changed buyer perception with recent macro-economic shifts happening. Dealers creating a winning strategy around this data are being pro-active – they start reaching out to their customers well ahead of that maturity date. And it’s not just an auto-generated email that might or might not get opened.
They are reaching out being transparent about inventory constraints, really figuring out what that specific customers intentions are leaning towards. Then they give expert advice, either preparing them for the turn-in process, end of lease purchase or helping them pre-order a car so that when they are ready to turn in the car, one is available and ready for them. There are more variables these days and consumers want to explore more options than they might not have considered in years past.
Service Customers: How do you handle the data you have on your service customers? With many customers holding on to cars longer, and service centers capturing new customers with defection rates high, especially if they have available appointments when their competitors might not (or visa versa!), it’s time to re-evaluate your post-messaging strategy targeting those customers specific to purchasing or trading in their vehicle.
With the technology and data available today, you need to have a connected strategy between your front and back office that helps turn your service center into a profit center. Expensive service? Train your team on how service should be working with sales, as well as your used car department when the inevitable “Is it worth it or should I just trade it in” question happens. What if you’ve recently gained a new service customer? Or lost one? You should be staying in front of them to show them the experiences you offer and advantages of completing their next car purchase with your brand. Get strategic and activate your service customer data and your dealership will not only see an increase in profits, but in lifetime value customers as well.
Previous Customers: As we just mentioned above, brand defection rates are high right now due to many industry challenges and changed buyer behaviors. And 2023 will continue to feel that ripple effect. Understanding that this is happening to everyone, not just your brand and dealership, should motivate you to re-look at your data on previous customers.
When is the last time you connected with your previous customers? Do you stay in front of them with targeted messages, in the ways they prefer to be communicated with, on how your dealership and brand can make their next purchase even more efficient as well as provide the experience they want to win them back? Re-look at what your dealership is actively planning and doing with your existing data to recapture those previous customers knowing a consumer’s shifted desires and preferences, and both your retention rate and revenue will see a boost.
Strategy 2: Feed and Grow Your CRM
When it comes to your dealership CRM data, the successful dealer does more than simply manage it. When building a strategy, they’re also focused on how to activate and grow it.
Things have changed in our business, therefore we need to change how we do business – especially when it comes to our CRM’s. To truly feed and grow yours in 2023, don’t just think about what your dealership is doing today, but think about where there’s room for improvement and what you’ll be focused on in the future. It’s time to get back to the basics and build a strategic foundation that can overcome any industry challenges in the present as well as down the road.
Take your sales staff… They probably have a different looking pipeline than they did previously. With inventory challenges, increased interest rates, and brand defections happening, it’s more important than ever to use that data in your CRM databases to stay in front of and alongside your customer. This will not only help with gaining customers and growing your database – but helping combat the higher than usual potential most dealers are facing for losing them right now.
In order to build a modernized marketing strategy around your CRM data, ask yourself the following questions and think about ways you can build and grow:
- How often are you, or your dealership, reaching out to your CRM database? Have you taken into consideration people holding on to cars longer or waiting for inventory – have you adopted a new approach and plan based on those and other trends?
- You probably have 20 different phone scripts and strategies, but do you have connected data and communication strategies around your leads in your CRM? Just because a lead doesn’t reply to your email or text doesn’t mean they’re not looking. Have you mapped out what that 30-60-90-180-etc. day connection and messaging plan looks like?
- What do you know about your customers, or potential ones? Are you currently tailoring your messaging to that key personalized information you already have?
- How are you connecting with your previous customers that you haven’t seen in a while? Have they gone somewhere else for service? Are they contemplating a different brand? Are you educating them on your new services, capabilities, and experiences?
- How are you staying in from of your customers in your CRM database to show your brand is superior? Do you highlight and educate them on the unique differentiators of why they should do business with you?
Having a strategy to GROW your CRM database requires attention and establishing some daily habits, especially when inventory is lower, rates are higher, and economic challenges persist. Invest the time to truly see where past, current and future customers are, planting seeds to grow your CRM data, and then stay in front of them with your brand and experiences.
Strategy 3: Leverage Big Third-Party Data Partners
At Cox Automotive we always say our success, audiences and destinations can be yours. We say that because we have the tools and the technology aimed at serving the customer and driving business to our dealer partners. And how do we do that? We do that with data.
The results speak for themselves.
All of your collective data sources provide the answers and insights needed to reach your target customers, in-market shoppers that are ready to buy. You can access knowledge into what they are doing, what actions they’re taking, and what they are likely to do next.
When you have a strategy around mining that 3rd party data daily, you give yourself the ability to get in front of a new audience, stay in front of an interested audiences, and activate the data you already have to target messaging.
Especially Autotrader’s and Kelley Blue Book’s audiences – we drive trust by truly thinking customer first, and give you the opportunity to follow in-market shoppers and their path to purchase in your target markets.
As most of you likely know, Kelley Blue book is the #1 most trusted third-party automotive brand and Autotrader’s average gross per lead is currently the industry’s highest .* (please cite – VinSolutions data Jan – Aug 2022) When you have the chance to partner with big data partners like Cox Automotive, it can make your data smarter and give you a clear advantage when you leverage it’s true capabilities in the coming year to drive leads and increase business.
Strategy 4: Match Your Audience
We’ve discussed the importance of audience when it comes to data… especially reaching new, activating current in-market audiences, and reconnecting with previous customers. But when it comes to strategizing your data, it’s also important to match your messaging to the audience.
You’re no longer advertising one specific vehicle on your lot.
You’re now selling to the customer. Not the other way around.
You’re selling your brand and experiences based on what
data is telling and showing you their needs, wants, and preferences are.
This is especially important to your marketing plan with continued industry changes ahead of us in the coming year. You need to have a clear strategy of when to recommend pre-order, when to present a vehicle on your lot that checks almost all their boxes, and when to provide options to buy their current vehicle.
This is what we refer to as matching your audience. Match your marketing and messaging to consumers based on where they are in the purchase process, or lease process, or customer lifecycle process, and so on.
And you can do this with data.
Strategy 5: Clearly Identify Who Your Ideal Customers Are
You should be actively using your data to identify your ideal customers. As mentioned in the strategy above, when you are matching the audience to the vehicle, and not a specific vehicle to the audience, you have increased capabilities and chances to get in front of your ideal customer and stand out to them.
You’re no longer just selling a specific car… you’re selling your brand, experiences, and the fact you know and understand what they want. When you do this, they’ll want more than just a single car. They’ll want you.
For example, if you know your customer values comfort, safety and the newest technology making it easy for them to drive – you’re selling to their preferences, habits, and lifestyle. If they’re an existing client, you know and understand their buying pattern. Data showed you what’s important to them and now you can market to that instead of just marketing a specific car, and keep them coming back to you time and time again.
You’ll have more than just a one-time sale, you’ll gain a lifetime value client.
When building this personalized approach into your data marketing strategy you might want to ask does your sales team have a process for targeting the right buyer and matching them to a car on your lot? Do you also have strategy to flip a new car pre-order customer to a used buyer, or vice versa based on their lifestyle needs? If not, you should look at all the possibilities and train your staff from end to end on identifying your ideal customers’ needs, wants, and where they are in the process.
When you do that, you’ve just aligned yourself with increased sales and revenue possibilities. Today’s changed times call for dealers to learn to sell something much bigger than a car on a lot. The time has come to focus well beyond that initial sale and the potential of how that data and customer contribute to their overall strategy in years to come, especially if they’d like to increase their leads and revenue in 2023 and beyond.
Want help powering your business forward? The Deal Doers Solution.
Knowing how to use your data and insights in the five ways above will help you to drive sales no matter what the road ahead looks like.
We invite you to connect with us to take a deeper look into ways to capture, connect and activate your data to make it more efficient and effective. As your trusted partner at Cox Automotive we provide you with the solutions to run your dealership more efficiently, driving quality leads. But we also want to provide you with insights into what we see working. Our success, data, audiences and destinations can be yours as well.
Want more ways you can stand out to your ideal customer to drive profits? Watch the replay of Selling and Elevating Your Dealership’s Brand and Experiences to Drive Revenue, the highly attended Automotive News webinar with Karrie Sudbrack, VP of Dealer Sales.