CommentaryNov 28th, 2019

Reshape Your Marketing Efforts Using Audience Segmentation


The process of buying and selling cars has evolved substantially over the past decade. No longer do car shoppers go straight to the dealership; instead, they often do considerable research online before they ever set foot on a dealership. Sometimes, the car shopper may even purchase a vehicle entirely online. 

This leaves dealers in a quandary. How do you best reach prospective shoppers and entice them to purchase their next vehicle from you? 

Traditionally, dealers attracted customers through a “one funnel” marketing strategy. Under this approach, car shoppers fell into one of two categories — in-market or out-of-market. If a person were considered in-market, the dealer would likely send generic advertising messages — a wide net approach, if you will. 

This approach is problematic in two ways. First, it doesn’t cater to the preferences that are unique to each customer. After all, each person has their own wants and needs for their next vehicle. By categorizing them only as “in-market” customers, you ignore key details that could drive a sale, like what types of vehicles they have preferred historically. Secondly, it leaves out an entire segment of potential customers — those who haven’t entered the funnel yet. Similar to how there are identifiers that signal a consumer is "in-market" (e.g., looking at a dealer's website), there are identifiers that can demonstrate a consumer's potential to be in the market within the next six months. Understanding and identifying these signals creates a new segment of potential car buyers that dealerships can utilize when creating their marketing strategies. 

Ultimately, dealers need to shift from the mindset that there’s an overall funnel of in-market shoppers to one that recognizes that each dealership has multiple unique audiences within their funnel. 

The first step to identify your soon-to-be in-market audience is to understand what identifiers could signal a consumer’s likelihood to be in-market within the next six months. They could include financial events, like a lease coming to an end, or a new home purchase. It could also be more directly related to the vehicle — was there some sort of vehicle incident? Using predictive analytics, a dealer augments their own CRM data with third-party data, such as demographics, purchase behavior, etc. This enables them to identify which propensities to be in-market for a vehicle are most common in their area, and message accordingly. 

Learning the needs of your customers should shape the way you communicate with them. Using customer data, a dealership could, for example, identify individuals in a zip code near their dealership who have owned a specific make or model of vehicle, then reach out to them with relevant messages. Additionally, understanding what life stage a customer is in can be critical for message relevance. Imagine sending an ad for a minivan to an empty nester looking for a sports car — the ad would likely be glossed over immediately, whereas an ad that caters specifically to their needs will stand out in a sea of generic marketing messages.

While using additional data may seem a bit overwhelming at the onset, it doesn’t need to be. There are various advanced technology and tools that help dealers identify their local audiences without a heavy lift. Adopting predictive analytics and segmenting your audiences will empower dealers to understand customer needs better, even before they consider buying a car. Armed with that information, you’ll be able to develop stronger relationships with your prospects long before your competitors do, and –ultimately — increase awareness of your dealership’s services and raise your sales numbers.

Authored by

Amy Hughes

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