Behavior Prediction Tech Can Improve Stores' Marketing ROI

by Jack Nerad

A dealership owes its existence to retaining as many of its existing customers as it can and replacing those who defect with new customers. That is plain to anyone who has ever spent any time around the car business … or pretty much any business for that matter. Keeping the customers satisfied is a business goal so transcendent that it has been memorialized in song. Yet keeping loyal customers loyal is a more challenging task for a dealership than it is for other types of retailers.

Those who run coffee shops or delis or even clothing stores might see their customers several times a month or even several times a week. But a car dealership might not see a loyal customer for months or maybe even years at a time.

You've heard of long-distance relationships? For auto dealers, the relationship might better be termed "time-distant." And like a long-distance personal relationship, it can be hard to maintain. With any luck, your store retains the sales customer as a service customer after the sale, so that is one way of maintaining positive contact. But in these days when the titillating impulse to try something new is ever-present, providing good service experiences might not be enough to persuade them to purchase from you again, especially if that customer has moved across town, or if he or she drove crosstown to buy from you in the first place.


So the game boils down to keeping as many of your sales customers as is humanly possible, giving service customers the impetus to become sales customers, and gaining incremental business by enticing people you've had no contact with at all to visit your store and buy a car from you. Just like hitting a baseball or catching a trout on a dry fly, the basic concept is easy to grasp. Executing it is the hard part.

One thing you could do — one thing that a great many auto retailers resort to — is using mass media to put and keep their names in front of potential customers. TV, radio, and online ads enable you to reach many people at once with a concise message about what you do…and with luck, what you do that is different from the things all your fellow dealers do. But mass media can lack two key ingredients — relevancy and personalization. And without relevancy and personalization, the expensive messages are nothing but clutter. They bounce right off the potential prospect if, indeed, the prospect pays any attention to them in the first place.

On the other hand, big data plus the data you already have on hand in your DMS and CRM systems can enable you to create compelling, personalized messages to your customers and potential customers. When you think about it, your DMS knows a hell of a lot about each and every sales and lease customer you've ever had. That data can be used predictively to suggest to you — and to your customer — when they might be ready to transact with you again. The difficulty is data-mining it.

This is where behavioral targeting technology like that pioneered by a company called automotiveMastermind comes in. Its behavior prediction technology helps dealers anticipate individuals' automobile-buying intentions with an amazing degree of precision. This enables the automated creation of micro-targeted communications to current customers and prospects alike. Far from being one-size-fits-all, these communications are tailored to each individual and are delivered only to them.


"When you combine the DMS data that we have from the dealer on their customers with IHS Markit data, we've got over 1,000 points of data on these customers," Ian Grace, automotiveMastermind's senior manager of partner performance, told us. "That allows us to understand better who's going to buy and, more importantly, why they're going to buy. So that then we can empower the dealer with that information to make a proactive phone call or outreach to the customer."

In fact, the outreach itself might provide the impetus to begin the shopping process and to buy. For example, an email might remind the prospect that she is driving at a pace that could take her beyond the mileage limits of her lease. Or it could warn a customer that his vehicle is about to go out of warranty.

"Ultimately, what we're here to do is to let the dealer know what their customers' potential pain points or pleasure points are," Grace said. "Are you [the customer] in a bad spot? Or could we get you into a better spot? That's ultimately what's at the core of our technology. That's what we're letting the dealer know, and that's what our marketing is saying [to the consumer.] So we're here to ultimately help you."

This just in — helping customers actually works. More to the point, providing customers with reasons to transact that are unique to them and speak to their individual circumstances are keys to marketing effectiveness and favorable marketing/advertising return on investment.

Stores like Audi Princeton and Lexus of Warwick that rely on behavior prediction technology have found it has boosted their loyalty rates while at the same time gaining them sales from their service-only customers and from conquests of likely buyers in their areas. Mastermind dealer partner Lexus of Towson's first-month direct mail campaign based on the analysis of thousands of data points that enabled it to close 20 deals at a 63% close rate, up from the store's typical 35-40% rate.

The ability to predict when customers are going to buy and what customers are going to buy offers magical pieces of information that dealers can leverage to their advantage. But they can only use that leverage if they are able to deliver compelling, personalized information in a timely manner. And that's where technology must come to bear, technology that can have very salubrious effects.

"We've got some dealer partners that are such strong partners with Mastermind and truly believe it at such a core sort of cultural level for their store, that it's one of the questions that they ask in their interview," Grace said. "Have you ever heard of automotiveMastermind? Have you worked with automotiveMastermind at a previous dealer? And if they say yes, then that's a feather in that potential hire's cap."



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