Amy Hughes

Q&A with Wil Lewis, Experian’s chief diversity, equity, and inclusion officer Like many industries, the automotive industry has seen an increased—and much needed—focus on diversity in recent years. Why much needed? Consider this: Women make up 47% of the total workforce in the U.S., but only 18% of employees at automotive dealers.  While gender diversity is an important part of the diversity, equity, and inclusion (DEI) conversation, it’s just that—apart. DEI is much more than a single factor. And, it’s mission-critical for your dealership’s success.  To better understand what DEI encompasses, how to intentionally bring the needed focus into your dealership team, and why it’s key for success, I talked with Wil Lewis, Experian’s chief diversity, equity, and inclusion officer, whose responsibility is to ensure Experian’s programs and products reflect the employees, clients, and communities we serve and is a workplace where employees feel comfortable bringing their whole selves to work. Amy Hughes: Thanks for taking the time to chat, Wil! Can you tell us how you define diversity?  Wil Lewis: First, and foremost, we need to look at diversity through a more nuanced lens. Intentionally expanding our circles needs to be about more than just representation and focus on additional topics. When I define diversity, I often use four distinct terms: diversity, equity, inclusion, and belonging.  Diversity equals representation. For example, how many women or veterans do we have working for our organization? How many people of color? We actually do need to count the numbers.   Equity is removing systemic barriers that stop any one of those marginalized populations from reaching their greatest success. An example of a barrier could be an assessment test that you have to take to reach a certain position that isn’t accessible to a person with a disability. Equity means ensuring that items like that in our systems and processes are cleared away.  Inclusion is inviting folks to the table. But not just inviting them, ensuring they’re engaged in the conversations happening. Belonging is the underpinning of it all. Once you’ve invited that person to the table, ensuring they have a voice, equal opportunity to speak and to be heard. This means their opinion and feedback is something that is sought after.  AH: What I love about breaking down those terms is that it doesn’t focus on a single underrepresented population, it’s everyone. Why is this important for the business to continue to be profitable and achieve your goals? WL: When we think about why DEI is important, it’s because our society is diverse. Our businesses and dealerships need to be reflective of society as a whole. This will likely impact their revenue and bottom line. Think about sales. If you walk into a dealership as a veteran, and the person you’re talking to also happens to be a veteran, then you can share stories about your time in basic training or other experiences, and that instantly builds a relationship. And that’s ultimately what sales is about: relationships. As we work to build our businesses, dealerships, etc. we want to ensure they have a diverse population so they can relate to their customers. Not having that kind of representation can mean your dealership can lose a competitive edge.  AH: If we recognize that representation is not where it should be in our dealerships, what steps can we take to become more diverse? Often, dealerships pass from generation to generation, so diversity may not be top of mind. WL: Here’s what’s key: The owner will always be the owner, and for some dealerships, the owner may often be a member of the family. I see this in my local dealership. But, that doesn’t mean the leadership team is fixed.  You can ask yourself, who’s your finance manager? Who does your inventory? There’s still an opportunity to diversify your leadership team. And, if you’re really good, you look at who’s on your sales floor, and you pull them up. Look for opportunities to promote from within. Research shows that diversifying leadership is strategic for your bottom line. A study by Gartner found that 75% of companies with diverse and inclusive decision-making teams will exceed their financial targets through 2022. Additionally, gender-diverse and inclusive teams outperformed their less inclusive counterparts by 50%. AH: Once you’ve increased representation, what are ways to increase belonging?   WL: The first step any leader needs to take is self-awareness. If a leader doesn’t realize there is an opportunity to fix it, or that there’s something that can get better, it’ll never change.  Once the awareness is there, the leader needs to talk about it. The people who work in these dealerships are good—and I mean really good—salespeople. Good salespeople are driven by revenue, so talk to them in their language and explain how this impacts the bottom line.  Then, you need to measure the impact. Each organization needs to set its own KPIs, because it depends on the baseline and where they’re starting. But the ultimate question is: are you representative of the community you’re doing business in?  AH: Would you agree that sometimes this means looking beyond just the zip code in which you’re located, and being representative of all the zip codes from which prospective customers may come from? WL : Absolutely. Beyond just sales, think about the marketing impact this could have. Bringing together perspectives that are representative of your potential customers ensures that you’ll be more effective marketing to them, based on your team’s collective experiences and understanding of things like communication preferences.  This really ties back to your first question, because it shows how if we go with the linear definition of diversity and just count numbers, not much will change. But, if you intentionally seek to create a culture where people feel like they belong no matter what their background or experience is, and they know their voice is valued, there can be transformational impacts for your dealership. Your customers will feel the difference when they walk into your showroom.

There's no denying the automotive industry has had an impressive recovery from the early impacts of COVID-19. However, nearly a year after the initial shutdown, we also know that the landscape we're functioning in now is different than it was prior to the pandemic.  Having now survived two major downturns in the last 12 years, what's an automotive dealer to do? Not only do dealers want to understand how to adjust to the current landscape, but also how to anticipate changes so they can plan accordingly.  While there isn't a crystal ball that will answer all these questions, there is a powerful tool that can help dealers accomplish these goals: Data.  We know data can be overwhelming but looking at trends on both a macro and local level can inform strategies and guide implementation.  Looking at the big picture Take for example vehicle registrations. While there are seasonal ebbs and flows in registrations, what are the other factors that can impact volume? In Experian's new  Automotive Market Insights dashboard , we layered in economic indicators with vehicle registrations over time to better identify any correlations, and a number of them emerged.  For instance, about a month after gas prices go down, vehicle registrations begin to increase. A good example of this was in February of 2016 when gasoline dropped to $1.89/gal, and vehicle registrations began to rise a month later. The trend works in the reverse, too. In October 2018, gas prices were at $2.92/gal, and then we saw vehicle registrations drop in November.  Figure 1: Registration figures overlaid with gas prices on the Experian Automotive Market Insights Dashboard Applying this knowledge can help you identify how aggressive you need to be with marketing. You can ramp up as gas prices increase and then scale back as prices lower when people are more naturally inclined to purchase a vehicle.  This is just one example, but there are many. Layering vehicle registrations with additional economic indicators such as interest rates, unemployment, consumer sentiment can also be informative. Dealers who understand these correlations can then better anticipate shifts in the market based on paying attention to these economic trends.  Focusing on local  Of course, nationalized data will only take you so far. For dealers to be successful, you need to understand what the trends look like around your store, including the opportunities that already exist. This means going beyond your CRM database and looking for new customer acquisition strategies. One of the simplest ways to gauge opportunity exists around your store is to understand how many vehicles are coming off-loan or lease or moving into positive equity. Reaching consumers even before they're in the market gives you the opportunity to highlight why your vehicle could be a better fit for them before they even think about checking out the competition.  But that's not enough on its own — you need to know  who  your customer is, and  what   matters  most to them. Layering in additional data can help pull these insights out. For example, Experian recently did a study that found millennials and Gen Z are the only age groups seeing growth in vehicle registrations. Even within these two age groups, there are differences in what and how they are financing.  Gen Z is more likely to finance a vehicle than millennials. Additionally, Experian's research found that older millennials (ages 40-33) are more likely to purchase passenger vans, while Gen Z tends to prefer sedans. Understanding these generational nuances can help tailor your marketing strategies with more relevant messages that resonate.  Data is only useful when it's used to draw out actionable insights. Looking at both macro and local trends will help you refine your strategies and implementation. Understanding the impact of economic indicators on vehicle registrations can help you adjust your strategies to better prepare for what's ahead. Localized trends will help identify who your customer is and what matters most to them. Ultimately, reliance on data will continue to help dealers manage the current environment and continue to move the industry toward recovery. 

At the beginning of COVID-19, people would throw around the term "the new normal." At the time, it was hard to understand precisely what that meant, and realistically, it still is; our landscape is still unfolding. But we can't wait for the "new normal" to settle in. We need to continue to navigate and adapt, which means assessing and controlling what the new normal looks like for your dealership.  And honestly, it's going to look different for every dealership. Vehicle sales dropped at the onset of the pandemic, but the industry appears to be moving toward recovery. However, despite vehicle sales rebounding, the same can't be said for other areas of the business that were impacted by COVID-19. According to the National Automobile Dealers Association, the average dealership decreased advertising spend in July by 21.3% compared to the same period last year.  The root causes for the decline can all be attributed to the pandemic, though the reasoning can differ. Some dealers reduced ad spend due to inventory shortages. Others perceived a diminished return, particularly with vehicle sales increasing amid a pullback on ad spend. But did you know that you can still be efficient and improve your return on ad spend? To do this, you need to eliminate the waste — and you can do that by leaning on data.  Start with local analysis  In order to reach potential in-market buyers, you first need a good grasp of the activity within your local market. This requires understanding the sales performance of your core makes and models not only at your dealership but also at your competitors. Looking at sales trends by zip code can be especially telling. Consumers have always explored what options are available to fit their needs when in-market for a vehicle. Now, more than ever, consumers seek to maximize their budget without compromising on features.  Ultimately, you need to understand what your consumer is looking for — whether it's fuel efficiency or more legroom — and create marketing messages accordingly. Addressing their needs in your messages will ensure that they resonate and have a higher likelihood of bringing them into your showroom.  Start toward the bottom of the funnel Bear in mind that COVID-19 is still a fluid situation for many Americans. Some will have a newfound need for a vehicle, while others may put their purchase intent on hold. Because of this, you need to make sure you're reaching consumers who truly  are  in-market. To refine your audience, working with a third-party can help you focus on specific groups, such as those with positive equity on their current vehicle, those who had a recent vehicle incident, or those who have an expiring lease, to name a few.  Leveraging both sales data and focused audience segments will give you the opportunity to start your marketing efforts closer to the bottom of the sales funnel, rather than the more generalized top portion, where the "spray and pray" method is often used. While that method has historically been effective for awareness, today's savvy dealers realize that marketing isn't about awareness — it's about driving the bottom-line while being efficient.  Use data to define success It's important to decide what metrics matter the most to your dealership in the current environment, measure your results regularly, and adjust strategies according to what the data tells you.  At Experian, one of the most telling metrics is what we call High-Value Users, which helps us identify which consumers are truly the most likely to purchase. These consumers have exhibited behaviors that show a higher propensity toward a vehicle purchase, such as spending a certain amount of time on a website or visiting it multiple times.  Once you identify the High-Value Users, you can continue to refine your strategies and create even more focused campaigns. Becoming hyper-focused on these High-Value Users has shown strong results. According to Experian dealership research, High-Value Users deliver an average of 68% more web traffic, an 8% lift in sales, and 10% lift in market share.  Revitalizing and updating your marketing strategies isn't a one-time deal. To ensure efficiency, it needs to be done regularly. Correlating high-value user metrics with your audiences can help you measure campaigns' success and optimize them for the future. Understand how many sales a campaign is actually driving and what channels are most effective, then update accordingly. Oftentimes, working with a third-party is especially helpful in this area, as they can offer outside insights and insights specific to your dealership.  Marketing and advertising play a critical role in bringing people into the showroom, whether in-person or online. The perception of diminished returns is just that — a perception. There's still the opportunity to reach the in-market shopper. You just need to rethink your strategies. Focusing on using every marketing dollar to its full potential will help you not only navigate the recovery but thrive by consistently bringing people into the showroom.  

If there is a lesson to be learned from the first half of 2020, it's that things can change — fast . The COVID-19 pandemic has left an undeniable impact on the automotive sector, but we know that, as an industry, we will move forward and succeed.  As we navigate the weeks and months ahead, every aspect of the dealership will have a role to play. As marketers, our role is especially critical — particularly as many dealerships manage costs and reduce ad spend. We need to be strategic. We can't simply revisit pre-pandemic strategies. In an ever-shifting market, we need to be dynamic and make sure every dollar counts.   Analyze to understand what's changed  While it can be overwhelming and stressful, the first step in the process is to simply analyze your dealership's recent activity and local market conditions to identify trends. Now that we're a few months into the pandemic, we can assess our local markets prior to the pandemic and now. The situation for many consumers remains fluid, so the people in-market for a vehicle at the beginning of March have likely changed. We want to make sure our messages are relevant to our audiences. Has the make-up of in-market buyers shifted? How have sales been impacted? To what extent? Have consumer preferences shifted? The more we understand about our local market, the better our ability to create messages and campaigns that effectively address the needs of specific audience segments. For instance, while some people may not be ready to buy a new car, they still need service and maintenance on their current vehicle. You can deliver messages that offer service coupons or educate them on safety protocols during service.  Ensure you're reaching the most relevant audience It was established long-ago that one-size-fits-all marketing campaigns aren't the most cost effective, but COVID-19 has heightened the importance of identifying the right audience and ensuring you understand their most pressing needs and how urgently they're looking to buy. If you plan to reach the same audiences you developed prior to the pandemic, it could backfire. Consumers may have taken themselves out of the market for a vehicle while the pandemic continues, so not only are your messages irrelevant, they could come across as insensitive and potentially alienate your valuable relationship.  The situation for most Americans continues to fluctuate. Dealers need to understand consumer sentiment and how potential car shoppers are reacting to the market — that will help inform your messages. For example, recent consumer sentiment research from Experian shows generational differences as to who's is in-market from a vehicle: As of July 1st, only 8 percent of Baby Boomers said they were in-market for a vehicle, but 35 percent of Gen X raised their hands. If your main demographic has previously been Baby Boomers, your messages will likely fall flat because they're not as interested in buying right now.  Though Gen Z, Millennials, and Gen X all say they're likely to be in market for a vehicle, Experian's data shows that how they plan to go about that purchase differs. While 74 percent of in-market Gen Xers plan to continue with their purchase as planned, Gen Z and Millennials appear to be more interested in exploring their options, whether that's purchasing something less expensive or leasing instead.  Understanding these differences and tailoring your marketing strategies appropriately can help you establish a relationship with a demographic you hadn't previously focused on. Ultimately, this will help keep your dealership moving forward to be successful in the long run.  The environment that we're operating in will likely continue to quickly evolve throughout the rest of the year, and we need to be ready to respond in kind. Running ongoing analysis will ensure you're keeping a pulse on changes as they occur. Layering in additional data points, such as consumer sentiment, can make the analysis even more informative, and any resulting campaigns more effective. At the end of the day, dealerships that maintain this level of intentionality with their marketing strategies will be building customer relationships that will flourish, no matter what the next few months bring. 

The automotive industry is no stranger to change, but COVID-19 cast us into a situation we’ve yet to experience. With stay-at-home orders and tight business restrictions over the first few months, the market saw an immediate impact. But now, as those orders and restrictions begin to loosen, many are preparing to resume business activity. However, the rules and processes you’ve implemented pre-pandemic likely need to be adjusted. COVID-19 has created a new market environment — one that will require dealers to adapt. The same can be said for consumers. Lives have been upended in numerous ways, such as a sudden loss or reduction of income. And, the impact will continue to be felt for months to come. As a result, consumers’ appetite and sentiment around certain topics, including buying a car, have shifted and you need to adapt to these changes. The situation will remain very fluid in the months ahead, and while the long-term impact of the pandemic remains unknown, here are a few best practices you can implement to navigate the new environment.  1. Use local market trends to inform strategies The pandemic has impacted everyone differently, which means that people’s priorities have shifted, and dealer strategies also need to shift. While buying a car may have been on someone’s radar prior to the start of the pandemic, it may not be top of mind anymore. As a result, simply reengaging your pre-pandemic marketing plans likely isn’t the most effective strategy. Instead, use consumer sentiment data to understand how consumers are feeling, and leverage these insights to inform new marketing strategies. Since sentiment varies across generations and geographies, it’s important to look not only at a national level, but to understand the implications of sentiment in local markets.  For example, Experian research found that as of May 21, 2020, 29 percent of consumers in urban areas were considering purchasing a vehicle in the next few months, compared to only 10 percent in rural areas. Of consumers in urban areas looking to purchase a vehicle, 33 percent are looking to purchase something less expensive than originally planned, and 22 percent are considering leasing. Insights such as these can help you nuance your marketing messages to ensure you’re leading with empathy and showing customers a willingness to help by presenting them options that best fit their needs.  2. While adjusting business strategies, focus on other areas that can grow Depending on their situation, some consumers may be hesitant to re-enter the car-buying market. And that’s okay, everyone’s circumstance is different. Many of these consumers will still need their current vehicles serviced; some may even have open recalls. Canvass the vehicles on the road within your market to identify which may need service in the near future. The more you understand about vehicles in your local markets — current customers and beyond — the better positioned you will be to create revenue opportunity within the service drive.  3. Use vehicle history reports to bring context to online listings While you may be looking for ways to trim costs, there are some areas, like vehicle history reports, that are more important than ever. Given the significant financial investment a vehicle represents, we know consumers seek to make an informed purchase decision – especially now. That’s why when listing used vehicles online, it’s vital to provide more information than vehicle make, model, and odometer reading, since these metrics can’t provide the full context of a vehicle’s value.  Vehicle history reports can answer key consumer questions, such as the number of previous owners, the number of incidents, open recalls, the presence of title brands, etc. Including vehicle history in online listings makes this information easily accessible for the consumer researching the vehicle. Ultimately, including vehicle history reports in online listings creates a level of transparency that consumers appreciate. While an online experience will never truly replicate an in-person experience, ensuring streamlined information is available online will help dealers connect with customers on their preferred medium.  4. Understand the implication of increased digital transactions With the increase in digital transactions in the automotive industry, there is a corresponding potential increase in fraud attacks. To best mitigate these risks and protect customers, you need to move beyond sole reliance on basic identifiers like name, date of birth and social security number — many of these basic identifiers have been compromised over the years. Instead, new technologies allow dealers and lenders alike to employ a multi-layer fraud strategy that more accurately identifies consumers. This could include techniques such as device intelligence, biometrics, and document verification.  COVID-19 has created a new market environment that is truly unprecedented. The automotive industry is resilient and will remain so as long as it recognizes the need to adapt. By understanding consumer sentiment and responding to consumer needs, dealers will build relationships with new and existing customers that will position them for success today and in the post-pandemic world.  

Reaching customers online can drive sales before they visit dealerships With the power of the internet at their fingertips, consumers of all ages increasingly research what they want to buy before making their purchases. In the U.S. alone, it is projected that by 2021 230.5 million people will be shopping online , up from 209.6 million in 2016. It’s a sign that they are becoming savvier consumers–after all, you wouldn’t close on a house before looking at all your options. When it comes to a purchase as significant as a car, most consumers will be doing their due diligence to find the right vehicle. In fact, a recent report found more than 80 percent of car buyers conduct online research when looking for a car. In order to drive sales in the evolving digital space, dealers need to examine how they reach customers online and optimize their marketing tactics. Growth of online sales provides new choices for consumers Competition for customers has only increased thanks to the growth of online sales. Now, car shoppers can easily find thousands of automotive websites to compare reviews and prices. Some shoppers are taking it a step further, completing full vehicle purchases from the comfort of their homes. Online retail companies like Carvana offer consumers a new level of convenience by limiting the car shopping experience to digital interactions. So how can traditional dealers compete? Many dealerships have already adopted an online sales model for their business. OEMs have started to roll out online ordering systems their customers can use to purchase vehicles. One automaker, Volvo, is making a commitment to dealerships by requiring customers who purchase its vehicles online to choose a dealership location and accept the retailer’s offer on finance packages as part of the purchase. This links a customer to a reliable location for future vehicle services while providing additional revenue for the dealership. Use digital marketing to reach your customers After the Great Recession in 2008, dealerships had to reevaluate their marketing strategies. Many found that their online sales efforts needed to grow, or in some instances, be established. This strategic shift has only continued to grow in popularity – as of 2017, online advertisements made up 55.4 percent of dealership ad budgets, compared to 22.2 percent in 2009. However, if your marketing messages don’t resonate with customers, it can be an uphill battle to bring more business into your dealership. To create strategies that reach online shoppers and bring them into the showrooms takes data. But, with the vast amounts of data created, it can be difficult for a dealer to know where to start. Often, dealers will try to leverage either national statistics, or base strategies off data only in their CRM and previous purchase history. The problem with this is that each community has unique needs, so national statistics don’t always apply. Additionally, relying on just CRM data means that you could be missing households that are in the area and in market, but haven’t been to your dealership previously. To alleviate this, dealers should work with a third-party partner that can not only provide a platform that will augment a dealership’s data with additional localized insights, but will work alongside them to help them better understand the insights on a monthly basis. Additional data can give you a better understanding of what activity is occurring in the area immediately surrounding your dealership, but it’s dynamic. Having a partner who can help interpret the data, will help ensure that your strategies–whether in store or online–are as strong as possible, and bring more people into the store. Car shoppers are not going to wake up one day and stop using the internet to find their next ride. While it may be uncomfortable to change your business strategy, rolling with digital can deliver knockout sales numbers. Taking a step into the online sales space can help modernize your business and grow your total customer base.