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A Guide to
Data-Driven Marketing for the Automotive Industry
Trends and technologies
that are shaping the industry
and techniques to help you
stay on top
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Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1: Going Online . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Chapter 1: The Landscape of Online Marketing . . . . . . . . . . . . . . . . . . . . 5Automotive Consumers Are Making More Purchasing Decisions Online . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Don’t Neglect Traditional Methods . . . . . . . . . . . . . . . . . . . . . . . . . 7
Remember to Coordinate Between Online and Offline Channels . . . . . 9
Chapter 2: Millennials: Driving Marketing Change . . . . . . . . . . . . . . . . . 10
Creating the Starbucks Atmosphere . . . . . . . . . . . . . . . . . . . . . . . 10
Emulating Apple’s Customer Service . . . . . . . . . . . . . . . . . . . . . . . 11
Nurturing the Online Environment . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2: Improving Your Techniques . . . . . . . . . . . . . . . . . . . . . 14
Chapter 3: Rethinking your Acquisition Strategy . . . . . . . . . . . . . . . . . . 14
Identifying Consumers Who Are in the Market Now . . . . . . . . . . . . . 14Identifying Consumers Who Can be Influenced to be In the Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Chapter 4: Maximizing Your Messaging . . . . . . . . . . . . . . . . . . . . . . . . . 18
Who: Finding the Right Consumers . . . . . . . . . . . . . . . . . . . . . . . 18
What: Choosing a Marketing Channel . . . . . . . . . . . . . . . . . . . . . . 19
When: Timing is Everything . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table of Contents
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Section 3: Marketing Tactics for the Automotive Sector . . . 22
Chapter 5: Expanding the Lender-Dealer Relationship . . . . . . . . . . . . . 22
Starting the Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
More Effective Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Expanding the Consumer Pool . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Chapter 6: Getting More Business from Defunct Brands . . . . . . . . . . . 26
Options for Orphan Car Owners . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Marketing to Orphan Car Owners . . . . . . . . . . . . . . . . . . . . . . . . . 27
Conclusion Finding the Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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IntroductionSince the advent of big data, information has become a powerful
marketing ally, eliminating the guesswork and helping you zero
in on the right targets, the first time. But the dizzying array of
marketing tools and data choices make it difficult to know where
to start.
In the onslaught of new technologies, what should auto lenders
and dealers be paying attention to? Which marketing techniques
should we adopt, and which ones should we discard? How
can we best leverage new technologies and meet consumers
in this new digital space? This guide was designed to answer
all of these questions, helping automotive marketers learn how
to stay relevant by using data-driven marketing to connect with
consumers and close more sales.
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Chapter 1: The Landscape of Online Marketing
In the world of automotive marketing, online marketing is playing a bigger
and bigger role—for both lenders and dealers. Consumers are the ones
driving this trend, as more of them go online for work, socializing, network-
ing, and education.
To meet this demand, the automotive industry is spending more and
more on digital marketing and advertising. According to an article by
eMarketer.com in fall, 2013, the U.S. automotive industry spent about
$5.07 billion in 2013 on paid digital advertising, and that number is
expected to rise to $7.80 billion by 2017. The continued growth makes it
likely that the U.S. auto sector will become the second-biggest spender in
paid online and mobile media by 2015, surpassing the financial services
industry.
What does this mean for automotive lenders? With so many consumers
online, and so many marketing dollars allocated to this medium, it is more
important than ever to make sure that resources are spent wisely, and that
Section 1: Going OnlineAutomotive consumers spend increasing amounts of time
online, using the Internet to connect with brands and to make
purchasing decisions. In this section, we will set the stage
for automotive marketing in the digital age, showing how
auto marketing has been changed by the Internet, looking at
marketing techniques for leveraging the Internet, and learning
how to meet the consumer in this new environment.
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marketing campaigns are tracked, measured, and modified along the way.
But before you even get to tracking and measuring, you need to deter-
mine the right balance of online vs. traditional marketing. This chapter will
focus on three important factors to consider as you navigate this complex
digital world.
1. Automotive Consumers Are Making More Purchasing Decisions Online
Automotive consumers are online, and they’re using a variety
of devices to research and interact with brands and products.
Increasingly, they are turning to the Internet to make purchasing
decisions. A January, 2014, automotive consumer survey by the
marketing agency Pepper Gang found that:
• 83% of respondents go online first when
researching their new car purchase
• 64% use online review websites as part of their research
• 58% use a mobile device to read reviews and compare
cars and prices while they are at a dealership
US Automotive Industry Digital Ad Spending, 2011-2017 billions, % of total digital ad spending and % change
Note: CAGE (2012-2017)=13.1%; includes advertising that appears on desktop and laptop com-puters as well as mobile phones and tablets, and includes all the various formats of advertising on those platforms; data through 2012 is derived from IAB/PwC data; includes all automotive-related categories including sale/purchase of vehicles and parts and maintenance.
Source: eMarketer, Aug 2013
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Section 1 GOING ONLINE
With access to the huge wealth of knowledge available online, con-
sumers are becoming more sophisticated in their product knowledge
and in their purchases.
TAKEAWAY:
With consumers increasingly taking on the role of product education,
research, and comparison, lenders and dealers should make it easy
for them to find and learn about loan and vehicle products. Messaging
should be clear, accurate, and as non-technical as possible. Content—
in the form of education or entertainment—must be high quality to
meet the expectations of these savvy shoppers.
2. Don’t Neglect Traditional Methods
With all of the recent attention paid to digital marketing, and in the
frantic race to reach consumers online, it’s easy to believe that tradi-
tional marketing methods are dead. But that’s a dangerous assump-
tion. Although more consumers are using technology to research and
interact with brands, there is still a strong place for traditional mar-
keting and education, particularly when it comes to direct mail and to
customer service.
Auto shoppers are doing more research than ever
Source: Millward Brown Digital/Google Vehicle Shopper Path to Purchase Study, September 2013
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A recent study by the research company fast.MAP showed that mar-
keters across all sectors tend to overestimate consumers’ preference
for using technology in customer service interactions. The firm also
found that marketers overestimated how many consumers were using
mobile and tablet devices to access the Internet. Studies like these
show that marketers are still trying to understand the uses and con-
straints of digital media, and that human contact is still a powerful part
of the sales process.
Direct mail still has a big role to play in marketing campaigns, as well.
It’s important to remember that many consumer segments are still less
familiar and comfortable with online channels. For these segments,
direct mail, dealership contact, and
phone calls will continue to play an
important role in the sales process.
But direct mail can be important
even for those “digital natives” who
have moved online for most of their
communication. This digital genera-
tion has become numb to the many
online marketing messages bom-
barding them, and they may never
open an email offer or respond to
an online offer. For these consum-
ers, a direct mail postcard may be
the only way of actually getting a
message in front of their eyes.
TAKEAWAY:
Don’t abandon traditional marketing techniques, as they still have a
powerful role to play in automotive marketing. Many of the lessons
learned from offline marketing and direct mail campaigns can be ap-
plied to digital marketing, including creating customer profiles, predic-
tive modeling, and targeting on display, to name just a few. The trick is
finding the most effective balance. Lenders and dealers should careful-
ly monitor the success and ROI of both offline and online techniques,
discarding those that are no longer working efficiently. We will discuss
this balance in the next section.
Consumers’ Customer Service Preferences Orange= Marketers’ Assumptions | White= Consumers’ Actual Preference
Email 17% | 32%
Company’s Facebook page 8% | 2%
Company website live online chat 10% | 7%
Twitter 7% | 1%
Phone 21% | 28%
In branch/face-to-face 16% | 18%
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3. Remember to Coordinate Between Online and Offline Channels
Increasingly, lenders are dividing their automotive marketing efforts into
online and offline channels, often under the jurisdiction of two totally
different departments. This kind of segregation can hurt your sales
efforts, as it is hard for one department to keep track of what the other
is doing.
A lack of coordination between online and offline marketing efforts
can waste money and turn off your consumers. If your offline market-
ing department is sending someone an offer for a 4% rate, and your
online department emails them with a 3% rate, you’ve not only wasted
money marketing to the same person, but you’ve also risked confusing
or annoying your consumer with mixed messaging. Is it necessary to
message the same person through multiple channels? Perhaps, but
this decision should be part of a deliberate strategy, rather than a hap-
hazard result of poor coordination.
TAKEAWAY:
A better plan is to coordinate, and even integrate, your online and
offline automotive marketing campaigns, understanding that all parts
must work together to produce a sale.
Keep the Baby and the Bathwater
In marketing, you need to meet your consumers where they
are accessing information . And in the automotive sector, that
is increasingly online, and on a variety of different devices . But
in the rush to adopt online marketing techniques, don’t throw
the baby out with the bathwater by forgetting about traditional
marketing . A carefully integrated approach, where online and
offline marketing efforts bolster and build on one another, is a
far more practical and efficient plan over the long-term .
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Chapter 2: Millennials: Driving Marketing Change
Millennials initially stumped the auto industry with their departure from
traditional spending habits and their hesitation to sink thousands into a
new ride. While Baby Boomers might consider a car vital to their freedom
of movement, the advent of public transit, the rising culture of “greenness,”
and the economic recession of the past half-decade have all contributed to
a generational shift in values. Even technology has driven Millennials away
from car ownership, as 18–34-year-olds are able to express their individu-
ality and connect with friends without leaving their living room.
As the economy recovers, however, the Millennial demographic is becom-
ing more and more powerful as twenty-somethings find jobs and enter the
marketplace as paying adults. Automobile marketers who hope to grab
Millennial market share need to start thinking about catering to the expec-
tations of this new consumer generation.
1. Creating the Starbucks Atmosphere
Today, it’s not enough to provide consumers with what they want—it
also matters how they feel about the process of getting it. And since
Millennials tend to place more value on experiences than on concrete
possessions, sales people should think about ways to keep them com-
fortable and happy.
The Millennials are driving this trend, and for them, it’s critical—an
expected part of the purchasing process. This doesn’t mean you have
to create separate experiences for different demographics, though, as
all customers will enjoy the added benefit of an upbeat association with
your company.
Many dealers have started improving the buying experience already.
For example, there’s been a noticeable change in service facilities, from
grimy waiting rooms with vending machines to more inviting spaces
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reminiscent of a Starbucks, complete with club chairs, big screen TVs,
and coffee bars making fresh espresso, and some even offering a de-
cent selection of fresh made sandwiches.
Still, this isn’t enough. Catering to the Millennial demographic means
ditching the old-fashioned salesperson persona altogether. Here are a
few considerations:
• Don’t be patronizing. After all, you’re pitching to
the most educated generation in the history of the
United States, and they’ll see right through it.
• Don’t be pushy. The stereotypical sales folk of yesteryear
would qualify for a restraining order with their high-
pressure vibes that repel the wary Millennial.
• Do provide information and assistance. Focus on being
helpful by sharing educational information and insights to which
your customer might not otherwise have access. We’ll talk
about customer interaction down below.
Remember: the ultimate goal is to provide your visitor with the most
positive sales experience possible, starting with a winning atmosphere
and a pleasant interaction.
2. Emulating Apple’s Customer Service
Stellar customer service is a critical component of this new environ-
ment. Let’s look at how Millennials are helping to shape this compo-
nent of the sales process, as well.
Millennials show an unusually strong penchant for interacting through
technology, with 41% citing a preference for electronic communication
over other modes of contact. They constantly have an electronic world
at their fingertips, through which they can quickly compare potential
lenders, car brands, and even customer reviews.
What does that mean for you as an auto financer? Lenders need to
shift to a more interactive, informative approach that builds trust. But
it’s more than technology—the Millennial came to you because they
need something done that their smartphone and computer can’t offer.
They need a recommendation customized to fit their life.
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And here’s the really good news: Millennials need and want your ad-
vice. Very few of them self-identify as finance-savvy, so they rely more
heavily on professional guidance than earlier generations.
In order to respond effectively, auto marketers and financers need to
take on an advisory role. A great model to emulate is the Mac special-
ist in an Apple store—ad-
vising, helping, and sharing
expertise without overtly
selling. This means creating a
partnership: the open, helpful
auto lender lays out the pros
and cons of various options,
and the consumer chooses
one. This is the level of infor-
mative, personalized service
expected by Millennials.
3. Nurturing the Online Environment
As a generation that relies on word-of-mouth more than any of its re-
cent predecessors, Millennials matter because they share their feelings
with everyone from friends to Twitter followers. For better or worse, this
creates a multiplier effect, driving conversation—both online and offline.
Your firm will only have one chance to make an impact, so you need to
make it a positive one. Your website, often the first place a Millennial
will go to check you out and conduct research, must be up to snuff.
For a generation raised in the digital world, there is a high expectation
of sophistication when it comes to online presentation. With your web-
site, a brand only has a few seconds to make an impression, so it has
to pack a punch.
From the website, Millennial consumers switch seamlessly to social
media, where they can either “like” a certain brand or broadcast their
discontent after a negative sales experience.
It’s up to you to ensure that a customer’s entire interaction with your
company is positive, starting with a sophisticated and informational
Millennials rely more heavily on a salesperson for information than older generations.
(MILLENNIALS: 49%, GEN X: 41%, BOOMERS: 38%)
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website, and moving out into social channels—but only as appropriate
and relevant to your audience.
Perfecting the Positive Experience
Auto lenders and dealers can learn a lot from great “experience
providers” like Apple and Starbucks . By delivering the
atmosphere and customer service that Millennials have come
to expect, we can perpetuate positive messaging and let the
customers do our advertising for us .
This demographic is seeking out fulfilling experiences in
the wake of the roughest economic crisis since the Great
Depression . Make choosing and paying for a car one of
these positive moments, and watch yourself surge ahead of
the competition .
Millennials depend more heavily on word-of-mouth when shopping for a car more than other generations...
(MILLENNIALS: 43%, GEN X: 28%, BOOMERS: 32%)
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Chapter 3: Rethinking your Acquisition Strategy
In automotive sales, timing is paramount—making a sale requires you to
market to the right consumer at exactly the right time. To do this, it helps
to separate your target consumer base into two different groups: 1) con-
sumers who are in the market for a car now, and 2) consumers who are
not in the auto market currently, but who could be influenced into buying a
car in the near future. Acquiring automotive leads in each of these groups
requires a distinct strategy, but the commonality is that you’ll need the right
data to help uncover the opportunities. To make your auto marketing tasks
a little easier, we’ve put together some considerations for improving your
customer acquisition strategy and closing more sales this year.
1. Identifying Consumers Who Are in the Market Now
Consumers who are actively looking to buy a car are the hottest
of all leads. But you have a very limited time to reach these pow-
erful leads. So how do you find car shoppers who are in the auto
Section 2: Improving Your TechniquesIn the day-to-day challenge of providing lending services, it’s
easy to fall back on patterns that are familiar and comfortable.
And while your regular marketing techniques might work just
fine, there are always areas for adjustment and improvement,
especially in the area of data. In this section, we will dive into
marketing strategy, offering tips on how to leverage data to
maximize your success, across the board. Are you ready to take
auto marketing to the next level?
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market? Using technology and predictive modeling, it’s now possible
to pinpoint these consumers. Your data provider should look for the
following characteristics:
Consumers With a Short Time Left on Their Existing Loan or Lease
Potential auto buyers whose lease is about to expire or who are
close to paying off their auto loans are probably looking for a
new car—if not now, then
very soon. Experience has
taught us that the sweet
spot, for auto marketing
purposes, is targeting
those consumers who have
only six to nine months left
on their lease or loan.
People Undergoing a Significant Lifestyle Change
Consumers who have
recently experienced a sig-
nificant, non-credit-related
lifestyle change will often
need a new car to accom-
modate that change. For
example, a couple who has
had a new baby might be
in the auto market for a bigger car, SUV, or minivan. Indicators
of lifestyle change include growing families, moving to a new lo-
cation, graduating from college, finding a new job, having adult
children go to college or move out of the house, and more.
Consumers Making a Credit Inquiry
Consumers who have requested an auto loan inquiry through
one of the three major credit bureaus are signaling their immedi-
ate intention to buy a new car. To ensure that you’re not missing
any of these in-the-market automotive consumers, look for
data providers that monitor all three credit bureaus—Experian,
Equifax, and TransUnion.
Consumers who have requested an auto loan inquiry through one of the three major credit bureaus are signaling their immediate intention to buy a new car.
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2. Identifying Consumers Who Can be Influenced to be In the Market
Active auto shoppers may be the hottest leads, but the window of
opportunity to reach them is short, and it’s likely that other lenders are
also wooing them. But what if you could convert a non-shopper into
an active shopper? Again, using predictive modeling, it’s now possible
to target certain automotive consumers, employing marketing and ed-
ucation to move them into the market. Here’s how to recognize these
receptive car shoppers:
Consumers Who Can Upgrade Without Changing Their Current Monthly Payments
Often, consumers driving older cars are those whose payment
plans are costing them more, or the same, as upgrading to a
new car—as well as increased maintenance costs. After iden-
tifying these consumers, educate them about the low costs of
purchasing a new car through your loan plan. Some of these
consumers will suddenly be in the auto market.
People Who Have Experienced Credit Changes
People who have experienced credit changes are often good
candidates for auto loan marketing. This tactic works for both
categories of people: those who have increased their credit rat-
ing and now qualify for a more expensive car, as well as people
whose credit has dropped, indicating that their financial situa-
tion could have changed and their current car payments may
be too high. Obviously each category will require different loan
products and auto loan marketing and education.
People Who Are Unlikely to Re-purchase Their Current Car or Brand
This category describes the group of consumers who are un-
likely to purchase another car from their current brand. This can
happen because the brand has become defunct, like Hummer
or Saturn, or not available in the U.S. market, like Suzuki. This
can also happen because a current owner is unhappy with his
or her current car—for example because it is a lemon or has
had many recalls. Predictive and behavioral modeling can iden-
tify this receptive consumer group, and then your auto market-
ing can turn them into active auto buyers.
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Starting with the Data
Marketing to consumers who are currently in the auto market,
as well as those who can be influenced to be in the auto
market, should be part of your strategy for improving customer
acquisition and closing more sales . But your customer
acquisition strategy needs to start even earlier, with finding
the right data provider . Not only should providers be able
to help you identify receptive auto buyers using both credit
and non-credit indicators, but they also need to take it a
step further . What activities have been working for your firm?
Which demographics are consistently buying, or avoiding, your
product? The very best providers will comb through previous
data to find answers to these questions, identifying trends to
help you maximize your auto loan marketing resources, saving
money and converting more customers .
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Chapter 4: Maximizing Your Messaging
Effective automotive marketing requires sending the right message, to
the right person, at the right time. Firms that fine-tune this process enjoy
a higher conversion rate. This chapter examines the messaging process,
with specific steps aimed at maximizing your efficiency across all three
variables: the who, the what, and the when.
1. Who: Finding the Right Consumers
Reducing the number of wrong-fit customers in your marketing list
saves time and money. But how do you find the right audience seg-
ments? Using a combination of predictive modeling and data assets
will enable you to craft your offer customer by customer, achieving
more effective messaging across both traditional and digital channels.
Your data provider should be able to help you in this effort by determin-
ing who is likely to be in the market, and what kinds of cars they are
interested in.
DETERMINING WHO IS LIKELY TO PURCHASE
To help you find your ideal customer, predictive modeling and data
resources will identify key characteristics of people who are good
fit for your product and are likely to be in the market. Here are a
few examples:
• People who have recently posted credit inquiries
• People who would not experience a significant increase
in monthly payments if they purchased a new car
• People who have experienced recent credit changes
• People with one or more of many possible
life events or lifestyle changes
• People with certain buying behaviors
• People who are close to completing their loans or leases
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DETERMINING WHAT KIND OF CAR
Once you identify your ideal customers, predictive modeling and da-
tabase resources can help you personalize your offers even further by
helping you figure out which type of vehicle to push. Look for:
• People going through lifestyle changes that could result
in the need for a different type of vehicle—moves, family
changes, income/job changes are some examples
• People who are driving vehicles from makes that
are no longer available, vehicles which have had
recall issues, or reliability problem could be looking
to simplify the vehicle ownership experience
• People who could be interested in certain types of
vehicle features, such as hybrid, all wheel drive, etc.
• Most importantly, predictive models which
identify the most likely, as well as unlikely, vehicle
segments for each target customer
2. What: Choosing a Marketing Channel
After you’ve established your list of ideal customers and figured out
which car to market to them, the next step is figuring out how to reach
them. Email, direct mail, telemarketing, social, video, mobile—which
marketing channel should you use? Channel selection is driven by sev-
eral key factors, all of which can be determined through data:
Personal preference of consumer
Not all marketing channels work for all consumers. Some
consumers are more email responsive, while others respond
to direct mail. Using demographic and behavioral data points
including, but not limited to, consumer age, location, and
income level, you can help determine which channel to use for
which consumer.
Consumer Value
Not all consumers are created equal, and it makes sense to
spend more dollars targeting the leads that are more likely
to result in a sale. Your data provider can help you establish
categories of consumers (first tier, second tier, etc.), based on
their value. For example, if a certain consumer fits your profile
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perfectly and has demonstrated that they are in the market, you
will want to spend more effort and money marketing to them,
and fewer resources marketing to a consumer who fits your
profile but is not actively in the market.
Consumer Position on the Sales Timeline
The effectiveness of various marketing channels can differ,
depending on where a consumer is on the sales timeline. For
example, online messaging will be more important to a custom-
er in the research or very early stages of buying. As the con-
sumer moves forward in the decision process, other channels
or combinations of channels may be more effective for channel
spend and consumer response. We will explore this further in
the following section.
3. When: Timing is Everything
Timing plays an important role in automotive marketing. Let’s say you
have identified the perfect consumer, established that he’s currently in
the market, and figured out that he is not email responsive. So a direct
mail campaign is the logical marketing channel, right? Maybe not!
Before you make that decision, take a look at where the consumer is
positioned on the sales timeline. If this consumer has just applied for
financing, a direct mail campaign could be too late to reach him. Our
analysis indicates that more than 50% of the people who apply for
automotive credit are still in the market in the days after the trigger,
however timing is important and a mix of direct mail, email, digital and
phone should be utilized. In this case, a direct phone call would make
the most sense. Timing is a critical part of messaging, and you need to
factor it into any larger marketing campaign.
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Creating a Seamless Messaging Process
The last piece of the messaging puzzle is coordination . In many
organizations, there is a disconnect between digital marketing
strategy and the marketing strategy for other offline channels .
It is further complicated by different agencies and teams
working in silos .
In the worst cases, this lack of coordination actually impedes
sales performance, as mixed messaging can confuse or
frustrate potential customers . For instance, if you send a
consumer an email saying he is eligible for a 2 .9% interest
rate and a piece of direct mail saying he is eligible for a 4%
rate, he is likely to walk away confused and annoyed—two
characteristics that are unlikely to result in a sale . The same
thing can happen if that consumer receives conflicting
messages about which car he should buy .
Instead of thinking of your digital capabilities as a separate
activity, your digital strategy should be pulled into your overall
customer marketing strategy . The goal should be to create a
seamless messaging process that encompasses all channels:
digital, direct mail, email, phone, and more .
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Chapter 5: Expanding the Lender-Dealer Relationship
For lenders engaged in automotive marketing, a powerful way to expand
your pool of customers is by partnering with car dealers. After all, the more
dealers you can create relationships with, the better your chances are that
their customers will finance through you. This chapter will help you un-
derstand how to begin or enhance those relationships, and what benefits
dealers will enjoy from these efforts.
1. Starting the Relationship
If you want to create a relationship with a dealer, you have to go to
where they are. Here are some ideas to get you started:
Events
One of the best ways to reach multiple dealers is to attend
industry events where dealers are also participating. Events
include car shows, trade shows, and conferences hosted by
reputable industry organizations like the National Automobile
Section 3: Marketing Tactics for the Automotive SectorThe automotive sector is a unique industry, and there are certain
marketing strategies that only apply to this sector. In this section,
we will explore tactics that are specific to the auto marketing
sector—ones that we believe are vastly underutilized. Add these
to your marketing toolkit and get a jump on the competition.
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Dealers Association. Participating in these events offers valu-
able networking opportunities, but speaking is even better.
Event organizers are often looking for speakers, and this is a
powerful way to demonstrate your expertise to dealers. Just re-
member that any talk you give should be educational and valu-
able to your audience, rather than self-promotional or “salesy.”
Focus on best practices and broad solutions. You may only play
a partial role in the broad solutions but your goal is to share the
approach and its potential.
Online
These days, a large part of networking occurs online. Find out
which social channels are frequented by dealers and then go
there. Besides connecting with dealers through their profiles,
LinkedIn offers a “Groups” function that has become a powerful
way to network and facilitate discussions with others in your in-
dustry. Another way to connect with dealers online is by search-
ing for them on Twitter and Facebook pages, engaging them by
starting a discussion or helping them solve a problem.
Home Turf
Many lenders use sales reps to meet with dealers on their home
turf. The advantage here is that you have a captive audience.
The disadvantage is that the visit could be intrusive, especially
if the dealer is caught off guard or has had negative experience
with other providers of auto marketing services. Make sure that
your reps are highly knowledgeable, and be as respectful of the
dealer’s time as possible. Connecting first through one of the
two channels mentioned above often makes a rep’s visit much
more productive.
2. More Effective Marketing
When it comes to marketing, many dealers still rely on traditional
methods—blanketing an entire zip code of consumers with direct
mailings, for instance. But partnering with a lender can greatly increase
the effectiveness of marketing campaigns. Lenders who use data as
the backbone of their auto marketing services can help dealers in-
crease ROI by: 1) not wasting money targeting people who are very
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unlikely to buy 2) and targeting those who demonstrate high need
and qualifications.
Credit-based Data
Partnering with a lender offers a huge advantage to a dealer
who wants to market to qualified consumers. Why? Legally,
lenders are allowed to prescreen consumers by pulling their
credit info—but a dealer cannot. (But keep in mind that a lender
who pulls credit info must follow up with a firm offer of credit.)
Using this information, a lender can provide dealers with highly
targeted marketing info, including which consumers in their area
qualify for certain products and which ones are actively shop-
ping for cars, and are more likely to be in the market due to
these driving factors.
Predictive Modeling
Lenders can also help dealers identify consumers who are
likely to be in the market in the near future. Using predictive
modeling, lenders can find consumers in the dealer’s area who
have recently experienced life-event changes, such as having
a new baby, getting a new job, or sending kids to college, and
are more likely to be in the market due to these driving factors.
Lenders can use this data to help predict what kind of car the
consumer should consider next. A good data partner will have
prebuilt models indicating the likelihood to be in the market, so
you don’t have to start from scratch.
3. Expanding the Consumer Pool
Besides helping dealers make their marketing program more effi-
cient, lenders can also expand a dealer’s pool of possible consumers.
Here’s how:
Identifying Invisible Consumers
Invisible consumers are potential customers who live in the
dealer’s area, but who are unknown to the dealer. There are a
number of reasons why these consumers might be invisible:
they have just moved to the area; they purchased a car from
classified listings, eBay, or Craig’s List (private party automotive
sales account for high number of all used car sales in U.S.);
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or they are young adults who have never purchased their own
vehicle. Since they are off the dealer’s radar, they are lost mar-
keting opportunities—a Honda owner who bought his used car
from Craig’s List could be living across the street from a Honda
dealership, and the dealer would probably have no idea.
Using data, a lender can identify those consumers, helping
the dealer start to build relationships. Invisible consumers offer
multiple opportunities: dealers can profit immediately by attract-
ing these owners in for servicing, they can market to those who
demonstrate need and qualification, and they can “conquest”
invisible consumers who own other makes but might be influ-
enced to try a new brand.
Targeting Existing Customers who are In-the-Market
Lenders can also use data to help dealers monitor their own
customers to see if they are shopping. Lenders can get an
instant alert if the existing consumer’s credit information gets
pulled for an automotive inquiry, demonstrating that the cus-
tomer is shopping. Lenders can share these red-hot leads with
the dealer, who can now reach these customers before they are
poached by someone else.
Bottom Line: Are You Adding Value?
When setting up partnerships with dealers, always think about
where you can add value . At the end of the day, dealers simply
want to sell more cars . If lenders can show how their marketing
strategies will drive more traffic onto dealers’ lots, they are very
likely to partner with you .
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Chapter 6: Getting More Business from Defunct Brands
Due to brand discontinuation and companies exiting the U.S. market, a
number of automobile brands have disappeared from the marketplace over
the past few years. But these brands still have many vehicles in operation.
In fact, roughly two-and-a-half-million owners are driving these “orphan ve-
hicles” today—owners who are ripe for jumping to a new brand. And we’re
not talking about owners of decades-old brands such as Geo, non-main-
stream makes like Aptera or Vector, or exotics like Maybach. We’re talking
about owners of mainstream brands, including Saturn, Pontiac, Saab,
and Hummer.
Overall, the automotive industry has an average vehicle brand loyalty of
58%, according to IHS Polk. But the number of orphan vehicle owners
staying with the same original equipment manufacturer (OEM) has de-
creased from 57% to 39% over a period of five years. The takeaway? With
low brand loyalty, orphan vehicle owners can often be persuaded to buy
another make—a challenge for the parent OEM as they try to retain these
owners, but a conquest opportunity for competitors for the win-over.
Number of Orphaned Cars Still on the Road, By Make and Year
Hummer
Isuzu
Mercur
y
Oldsmob
ile
Plymou
th
Pontia
cSaa
b
Saturn
Suzuk
i
100k90k80k70k60k50k40k30k20k10k
0
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1. Options for Orphan Car Owners
Since buying a new model of the same car is no longer an option,
there are three possible scenarios for orphan car owners who are back
in the market:
Purchase a Rival Brand
If a model and brand are both being discontinued, there is a
great opportunity for dealers, as well as captive and non-cap-
tive lenders, to convert orphan owners over to a rival brand. In
this scenario, the Suzuki Kizashi car owner could be positioned
into the Mazda 6—a totally different brand and OEM.
Move to Another Model in the Same Brand
If it is only a specific model that is no longer being manufac-
tured, but the brand is still strong, the company has a great
opportunity to move the client into a different car by the same
brand. An example here would be moving an orphaned
orphaned Honda Element owner to a Honda CRV. This works
especially well if the brand is offering a similar style model that
can be seen as an upgrade.
Transfer to Another Brand in the OEM Family
When a vehicle brand is discontinued, the parent company
may be able to convince the owner to switch to another of its
brands. With only 39% brand loyalty among orphan car own-
ers, the big question is whether the loyalty is transferable to a
different make within that OEM’s lineup. Automotive marketers
working for the parent company should proceed carefully, as
there could be negative feelings about a brand being discontin-
ued. An example of this scenario is Ford, the parent company,
wooing an orphaned Mercury owner.
2. Marketing to Orphan Car Owners
With low loyalty among orphan car owners, the playing field is wide
open—for OEMs as well as rival brands. The good news is that the
marketing strategy is the same for all three of the scenarios discussed
above. But how do you know where to start? Which orphan owners
should you target, and which car should you market to them? To de-
termine your marketing path, follow these three steps:
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Target Based on Behavioral Profiling of Current Owners
Which orphan car owners are the best fit for your current
offerings? Who are these consumers? For example, do you
understand who the recent Saab 9-3 buyers are, and which
other brand and model owners they most closely resemble?
Researching these commonalities is the first step. Uncovering
other behavioral preferences in the various demographics will
help you further determine what messaging will best resonate
with them.
Target Based on the Consumer’s Current Status
Some sellers make the mistake of trying to sell a consumer
the same type of car they are already driving, not realizing that
the consumer has changed over time. In fact, the longer the
owner has owned the car, the more likely they are to demon-
strate change preferences. For example, a person might have
more income than they did eight years ago, or may have added
children to the family. You need to analyze the owner’s current
status to determine the most likely segment for them today.
This is especially important for entry level and intermediate
vehicle owners.
Target Based on Right Timing
How do you know when orphan car owners are ready to buy?
Today, there are a host of online marketing and analytic tools
that can help marketers target potential customers and track
their pipelines. Use predictive software modeling system, like
In-the-Market Alerts, to help you to understand which buyers
are likely to be in the market or are in the market currently.
These system pull data from credit bureaus and other lending
agencies, sending you alerts when these orphan owners have
started actively shopping for a new vehicle.
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Putting it All Together
Faced with the impossibility of upgrading to a new
model of their existing car, and with their current cars
aging and becoming more difficult to service, orphan
car owners are a demographic asking to be marketed
to . Savvy automotive marketers who put time and
research into the demographic, who look at the
whole customer, and who use online marketing tools,
should find themelves in a good position to put these
orphans in a new car .
A good data partner will have prebuilt models indicating the likelihood to be in the market, so you don’t have to start from scratch.
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Conclusion Finding the BalanceTechnology and the subsequent availability of big data have
radically altered the landscape of automotive marketing, allowing
marketers to go further than ever before in their pursuit of finding
and converting leads. For many marketers, that change can feel
intimidating. But remember, even in this new environment many
tactics will stay the same:
• Finding consumers who demonstrate both need
and qualification
• Reaching the customer where they feel most
comfortable (whether that is online, in the mail,
or at a dealership)
• Realizing that some traditional marketing
methods, like direct mail, will still play a major
role in marketing campaigns
• Providing the best customer experience possible
Marketers who learn to strike a balance between old and new,
leveraging data while retaining the off-line techniques and
values that are evergreen, will find themselves riding the wave to
marketing success.
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About the AuthorSince its inception in 1997, Datamyx has emerged to become
a leading risk-based, data-driven marketing solutions provider
that helps consumer marketers optimize the prospect-to-
customer lifecycle with relevant insights across traditional and
digital channels. Our clients span the financial, automotive,
insurance and consumer services industries, and our solutions
help CMOs and marketing leaders make informed business
decisions and improve ROI by intelligently connecting the
right people to the right products at the right time. For more
information, visit http://www.datamyx.com
301 Yamato Road, Suite 4150
Boca Raton, FL 33431
How Many Customers Are Slipping Through Your Net?Find out how many opportunities you’re missing on
a monthly basis, including what this means for your
retention goals, conversion rates, and the bottom line.
Contact us for a Complimentary, Risk-Free Analysis at
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