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Many common methods of increasing dealership sales involve spending more on broad marketing campaigns or launching dealership promotions that can significantly increase the cost of customer acquisition. This model grows sales and gross revenues, but often does so at the expense of profitability margins and can be difficult to sustain in the long term.
What if a dealership could increase its car sales while decreasing the cost of acquiring those new customers in the process? That’s what personalized marketing does, and that’s the predictive analytics technology at the heart of Mastermind’s success for our clients.
In this blog post, Mastermind discusses:
Personalized Marketing Benefits Both Car Dealers and Customers
For auto dealers, personalized marketing improves the entire automotive sales process by making it easier and more effective to identify, communicate with and close high-quality prospects.
Personalized marketing is based on the core tools that drive successful digital-age brands like Amazon and Netflix: data and analytics. Starting with industry best practices, automated tools comb through massive amounts of data, learning what traits identify people who are – or are not –ready to purchase a car and then finds the people in a dealer’s market who show signs of being a prime prospect for engagement.
One benefit of well-executed personalized marketing to the dealer is that it provides real value to the consumer. It’s an excellent starting point for a high-quality dealership customer experience, because consumers have come to value personalized marketing that demonstrates a meaningful understanding of who they are, what they need and what they value. Consumers expect their online book store to know them well enough to suggest other books they might like; and they want streaming TV services to suggest the next show for them to binge watch. These are all examples of personalized marketing that provide a perceived benefit to the consumer and it’s all powerful relationship marketing tools that build an ongoing and loyal customer relationship.
How Personalized Marketing Works for Dealers
So, the dealership’s personalized marketing solution has identified and scored the top prospects in the marketplace. What happens next?
How Mastermind Does Personalized Marketing
If you’re going to base your marketing on data, then it really matters what data you’re using. At Mastermind, our success in improving dealers’ bottom lines starts with the data our system uses.
Data scope and quality matter when it comes to the customer scoring process or Behavior Prediction Score that begins a personalized marketing campaign. This analysis should combine publicly-available information about potential customers in a dealer’s market with proprietary data from sources such as credit bureaus and marketing data researchers – as well as a dealer’s own internal databases – to assess and score as many prospects as possible by their likelihood to purchase within a defined timeframe.
At Mastermind, our Big Data universe includes a variety of databases and datasets. Not all databases are of equal value, though. Mastermind has access to proprietary household demographic data from IHS Markit and key vehicle history details through the Carfax Snapshot tool. We also built a partnership with TransUnion to bring critical consumer financial information into play to turn service repair orders into new car sales.
Beginning with data like this means our Behavior Prediction Score® is a trustworthy targeting tool for predictive analytics marketing campaigns. When you start with the best data, apply cutting-edge analytics and factor in the real-world dealership expertise of the entire Mastermind team, it’s no wonder our dealership predictive marketing solutions slash per-sale marketing spends by more than $500 per car for our clients. (The average spend-per-car-sale with Mastermind is $115 vs. $629 for the industry).
Personalized Dealership Marketing: A Case Study
To understand how this all works in the real world, consider the experience Lexus of Towson had with a personalized marketing campaign powered by Mastermind.
In early 2017, the Maryland dealership launched a direct mail campaign based on Mastermind’s analysis of thousands of data points from third-party databases, as well as years of customer service and market data from the dealership’s operations that had been sitting largely unused.
The result was an unalloyed success: The one-month campaign drove 20 closed deals, making Lexus of Towson one of just two dealers in its region to be up year-over-year for sales in the month it was launched. How it got to that end goal is even more important, as it shows the power of personalized marketing throughout the entire sales funnel.
It began by getting more customers engaged. Personalizing dealership marketing materials and targeting consumers with the highest Behavior Prediction Scores® in Lexus of Towson’s market increased phone and email inquiries, as well as a surge of walk-ins carrying their personalized offers.
Potential customers were more interested and engaged than ever before thanks to the personalized offers based on Mastermind’s Behavior Prediction Driver® messaging. For example, customers were almost twice as likely than usual to open marketing campaign emails from Mastermind (39%, compared to a 27% industry average). Once they opened the email, the power of the personalized messaging truly shined through and they were more than ten times as likely to click through on the provided links than standard industry clickthrough rates (48% versus 3.7% CTR).
When highly-qualified prospects were contacted with personalized dealership marketing materials, followed up with using analytics-based messaging and engaged by an experienced sales team armed with offers and talking points tailored to their unique circumstances, the result was closed sales. The close rate from prospects targeted by this campaign was 63%, compared to the dealership’s standard 35-40% closure rate for all prospects.
Importantly, this all worked at a dealership that was already excellent at sales. Lexus of Towson was an “Elite of Lexus” dealership and the #1 Lexus dealer by volume in the Baltimore region for seven straight years before this campaign. It also made believers out of the dealership’s sales team, with more than 80% of the dealership’s sales staff regularly using Mastermind’s tools, compared with roughly 30% utilization for their prior sales tools.
Interested in seeing predictive marketing in action and learning more about what it would look like at your dealership? Contact us today for a free consultation.
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