Tag: conquesting

Experian Automotive Market Insights helps dealers efficiently identify potential conquest opportunities in their region and beyond.

Data driven insights about your marketplace are critical to your success. For instance, data can be used to determine if your customers are loyal or if they are likely to defect to another dealership. According to Experian research, there were 54 million consumer vehicle sales transactions in 2017. While that may sound great, not all returning buyers are loyal. In fact, we found that three out of four people are not dealer loyal. Even though only ¼ of a dealer’s customer base regularly return, the remaining ¾ can be conquested. 41 million non-dealer loyal vehicle sales happened in 2017, meaning there were 41 million chances to conquest for dealers across the country. You may be asking yourself “that’s interesting, but how do I win?”.  Start with best in class data. At Experian, we work with our North American Vehicle Database℠, File One℠ Credit Database, and Consumer View℠ Marketing Database. These databases have information including the history of 900 million vehicles in the United States and Canada, 10 billion vehicle history records, to consumer data about credit inquiries and data attributes for consumers and households. Figuring out how to increase customer loyalty and conquesting becomes simple once you consider Experian’s solution: Auto HyperConnect™. Auto HyperConnect is the answer to the question of “how do I use my data to win my market?” Our Auto HyperConnect suite includes two different products. The first is Auto HyperMonitoring™ which improves customer loyalty. The second is Auto HyperTargeting™, which offers four different ways to conquest vehicle owners: through owners/service, expired leases, off-loan, and current vehicle equity. Since there is a lot to talk about regarding conquesting vehicle owners, this will be a basic overview and we will go into detail later. Experian goes beyond providing quality data to our clients- we are your partner in the discovery of critical information to drive your success.  The first step in our Auto HyperTargeting methodology starts with discovery - working with an Experian Automotive representative to create the most effective conquest strategy. After that, quantify and understand what data is available and how similar records have performed historically. Next, execute the strategy by launching campaigns to communicate with prospective customers via direct mail, email, and phone, etc. Finally, measure and track results with quarterly marketing attribution reporting with Experian’s Auto Response Analysis With Auto HyperTargeting, these six product benefits help it to stand apart from the competition: Highly targeted audiences and attributes lists closely fit prospecting profiles. These profiles include geography, vehicle make, vehicle class, and lease maturity data. Append 1,500+ demographic attributes, 650+ psychographics, and 70+ Mosaic segments. Complete, accurate, and actionable data is delivered timely. Data derived from the source with proprietary processes ensure that it’s the highest quality and best coverage. Flexible marketing execution has no firm offer of credit required and customizable messaging for relevancy. Full visibility performance tracking has closed loop ARAs delivered quarterly with performance details. Performance driven audience hyper targeting approach gets dealers the closest to the customer as possible while saving time and money. Focusing on marketing strategy and tactics delivers results and eliminates waste from unproductive volume/cost opportunities. Finally, the competitive advantage takes market share away from the competition by identifying, engaging, and converting the right prospects. Briefly, here are the four different types of conquesting a dealer can do with Auto HyperTargeting: Expired Lease lets a dealer conquest new prospects based on customized input criteria including zip codes, vehicle makes and classes, and lease maturity data with the marketing flexibility necessary to drive engagement and win new customers. There is no firm offer of credit required. Vehicle Owners lets a dealer engage with current owners to enable new relationships and opportunities. These opportunities reach out to service and parts, aftermarket accessories, new/used car, warranty, insurance, and financial services. Vehicle Equity identifies, engages, and acquires new customers with positive vehicle equity status and maximizes sales opportunities. Getting consumers into a new vehicle, into re-finance solutions, into new loans, and get third party offers in front of consumers are all apart of vehicle equity. End of Loan connects dealers with consumers who are reaching the end of their loan term and help them transition into their new vehicle of choice. These include customized offers, getting consumers into a new vehicle, getting consumers into new loans, and getting third party offers in front of consumers. Juggling the requirements to both maintain customer loyalty and conquest for new ones can be difficult, but our Auto HyperConnect suite helps dealers to succeed at both. In our upcoming mini-series on conquesting with Auto HyperTargeting, we will detail it’s four core capabilities in more detail to help dealers to conquest with confidence.

The auto industry is blessed with an abundance of data - market research, demand estimates, demographic trends, registration history, not to mention your dealership's own sales and inventory data. Dealers are often visual people - who love beautiful cars more than boring spreadsheets. The more visual you can make your data, the easier it will be to make decisions based on what it's telling you. Here are the five steps to being a data-driven dealer. 1. Where am I selling the most cars? You probably have a good instinct about where the "hot spots" are around your dealership. But there's a reason many dealers often display a map somewhere in the dealership, with pushpins representing recent new and used sales. It's a tried-and-true technique because there's no substitute for a visual representation of data, especially to get a good sense of where you're currently successful. More importantly, it will also help you answer a critical question - where should I be selling the most cars? By layering your web stats, such as Google Analytics, on top of your sales data, you can start to see whether your PPC spend is resulting in sales. Then layer on registration data to understand whether you're maximizing opportunity in your own backyard. You might already be selling a lot of cars into a town, but looking at your on-brand market share will help you determine if you've fully penetrated the area. Looking at overall market activity, not just your own data, is required to understand where you fit into the bigger picture and decide upon your best sales strategy. 2. Where should we be conquesting? Once you've confirmed that you're (hopefully) dominating in your town and those directly adjacent to you, it's time to turn your eye to how to take on competitive dealerships farther afield. Again, data can help you determine next steps and target your budget appropriately. Every dealership approaches and defines "conquesting" a little differently, but there are two common techniques that can be made much easier using recent registration statistics. First, look for ZIP Codes outside of your immediate PMA that are selling a high number of on-brand vehicles. These are your competitors' happiest hunting grounds; focus on enticing shoppers in those areas to drive a little further to take advantage of special pricing or promotions, rather than attacking blindly in a 20-mile radius. 3. What is my best performing campaign now? No matter what your position is at the dealership, you need to know what's working best at any given moment. The GM needs to be able to make on-the-fly budgeting decisions, while the e-commerce Director wants to know which campaigns are working and what to do more of. But too often, the only objective measures we're regularly provided are traffic stats. Traffic is important, of course, but we'd suggest there are three factors dealers should evaluate for every campaign. A campaign may be driving lots of shoppers to your site, but if they're immediately leaving the site, they aren't worth much for you. A high bounce rate is your first sign that something is amiss since shoppers aren’t finding what they were looking for on your site. A second-level analysis involves looking at what other pages visitors looked at after hitting the campaign landing page. For an offer focused on a specific vehicle, visitors should be moving on to look at inventory on VDP pages. Free oil change promotion? Visitors should be spending time on the service portion of your site. Work with your agency or internal e-commerce team to determine what content, language and images are the most effective at engaging potential buyers to take the desired action. Speaking of action, conversion rate is your single best measure of whether a campaign is performing to expectations. Just make sure you're measuring actions that matter: Form submissions, email leads, mobile clicks to call, and visits to hours and directions pages all indicate various levels of positive customer interest in beginning a dialogue. 4. How do I determine whether my traditional advertising spend is producing results? Measuring dealer marketing ROI can be challenging, especially for traditional advertising. History tells us that radio, TV, newspaper, and outdoor are successful in driving demand, but quantifying that effect can be an elusive goal. But there are methods that will get you closer to determine the effect of your traditional efforts on sales. By tagging the start dates of all your marketing activities and mapping them on a trendline of your traffic for your URLs, leads such as phone calls, chat, and coupon codes for your service department as well as sales, you'll get a good sense about whether your offline campaigns are generating online interest.   5. Who is my ideal customer? Once you understand which models are likely to move next month, your next question should be: "Who am I selling to?" You probably have a good sense of your typical customer profile for many models (there's a good chance you're showing minivans and SUVs to young families, for example). But do you know where those customers live? And how to best talk to them? There is an incredible amount of data available on consumers, from credit history to buying behavior to lifestyle preferences. So how do you make use of this rich consumer data? At a basic level, Experian data can tell you a lot about the residents of each ZIP Code surrounding your dealership - from average age, income, and number of children, all the way to the most prevalent Mosaic® profiles in each town.  In a previous article, we talk about locating your ideal customer using Mosaic profiles. You might have a high number of "American Royalty" in one area, or an abundance of "Sports Utility Families" just a couple of towns over. This information can tell you not only where you might want to market particular models, but what medium and messaging will resonate best in each area. While only 15 miles apart, the Boston suburbs of Sudbury and Norwood are home to very different types of BMW buyers, suggesting vastly different marketing campaigns to best appeal to each.   Data is a necessary tool for understanding your ideal customer, improving your marketing results, and selling more vehicles. These five steps to becoming a data-driven dealer address all your requirements to enrich your marketing and conquest more successfully.

When sales are going relatively well, do you immediately look to conquesting? Are your key vendors encouraging you to do so? There’s absolutely nothing wrong with being out to conquer the world. No matter how you define conquesting – stealing market share from your competitors on their turf, making inroads on a cross-shopped make, or expanding your sales radius – chances are, you shouldn’t be focused on doing it. At least not until you’ve created some high barriers to prevent competitors from encroaching into your territory. Luckily, it’s easy to know when to stop conquesting and start getting defensive. All you need to answer is one simple question: Do you own your backyard?  Even when it feels like all is going well in terms of sales and market penetration, it’s worth taking another look. You might be doing lots of volume in your immediate vicinity, but still be missing out on a lot of potential sales that are going to your competitors. We suggest that most dealers shouldn’t be happy with anything less than 90% market share of new, on-make models in surrounding ZIP Codes™. If you’re not regularly tracking your “backyard” market share, it’s a good practice to get in. Here’s why you should care about totally shutting out the competition in your local area: You’ve got physical brand presence. Buyers in your ZIP code and the surrounding towns drive by your sign every day. Your name should be the first they that comes to mind when they think of your make. You should own hometown SEO. Do you own search terms like “Honda dealers in Lakeland”? If you’re not the number one organic search result for your town, you’ve got some work to do. These are your most likely service customers. Every local deal you walk away from is a potential – and profitable – service customer lost. If you don’t own your backyard, what should you do about it? Aside from making sure you’ve got your SEO and SEM in good shape, it may well be an inventory problem: Are you stocking the models that buyers in your area are looking for? Here’s where looking at data from outside your four walls can be helpful. Demand data which aggregates online search activity to determine what models shoppers are likely to be buying in the next six weeks – can be a great resource to determine what’s going to be hot. This can certainly assist you in acquiring in-demand used inventory, and while you don’t always have control over your new allocations, a grasp of local purchase trends can help you figure out where and how to successfully market the models you do have on your lot. You may find that one or two problem models are dragging down your total market share – either because you have a large volume of them in stock and they aren’t moving, or they are hot sellers and you don’t have enough of them to meet demand. Once you’ve got the basics covered and you’ve identified any inventory gaps, let’s get granular about your strategy to dominate market share. A great way to do that is to look at the models and zip codes where you’re losing market share, starting with your bread and butter models. Dig in and look at your market share, by ZIP code, for each of your high-volume models. If you’re well under that 90% threshold on Focuses or 3-series, for example, that’s a good place to start targeting your marketing efforts in your backyard. So how do you sell more cars into the Zip codes you’ve identified? By understanding the prospective buyers of your chosen model and laser-targeting your marketing to appeal to them. Demographic data from the likes of Experian Automotive can provide a rich array of details on the values and preferences of buyers who are most likely to be interested in your specific vehicles. From the advertising channels that reach them, to the types of offers and benefits they prefer to hear about, there’s a plethora of valuable information available to inform successful campaigns. Armed with this data, it’s possible to hone your messaging to appeal to those individual buyers, especially when undertaking campaigns that can be targeted down to the ZIP code level, such as PPC and direct mail. If you’re not already buying your PPC by ZIP code, and creating model-specific landing pages with customized messaging for each area, we highly recommend it for a dramatic effect on conversion.  We’ve seen rates rise from 2% to 8%, and inventory engagement rates rise from 50 to 90%, just by employing these techniques. By employing your marketing dollars more strategically and creating messaging that better resonates with consumers, you’ll be well on your way to consistently achieving dominant market share in your own backyard. But once accomplished, the work is not done! Be sure to experiment with conquesting against competitive makes – and do so in a controlled and measurable way.  Here are some considerations as you set your strategy: Choose just one make to take on… but avoid conventional wisdom. If you’re a Honda dealer, conventional wisdom says conquest Toyota – since they consistently show up in the list of cross-shopped makes for Honda, regardless of market. But Toyota buyers are highly loyal… how much are you going to have to spend to convince them to leave their tried and true models? Why not go after Kia or Hyundai instead? Stick with your bread and butter models. You might be all excited about that shipment of new electric vehicles you just got in stock, but those “specialty” buyers are going to seek you out. For the highest impact, spend your conquesting dollars where you’re doing the most volume. For example, , if you’re a BMW dealer, put your 3-series up against the Lexus IS. Choose 3-4 ZIP codes in your PMA where demand is highest. It may be tempting to try to lure buyers who are farther afield, but you are more likely to lose on the front and back end of every sale that’s over 20 miles from your dealership. Remember, we’re looking for buyers that are easy to lure and have a good shot at becoming loyal service customers These techniques can be used persistently to ensure that you own your backyard, dominate your PMA and steal market share from your competitors. All it takes is knowledge of your market. Your gut will lead you in the right direction most of the time, but look at the data to verify your instinct, and be open to being surprised. Take the time to wait for results before moving on to the next campaign. You’re guaranteed to learn something that will make you better next time. And there’s no need to go it alone. All this data and the accompanying visualizations can be found in Experian’s Dealer Positioning System®, or DPS, a dealership intelligence platform created expressly for auto retail. The DPS can surface recommendations on the models and ZIP Codes with the most opportunity, and a monthly Market Guidance call with one of our Performance Managers who can help you crystallize your strategy, track results, and hold you and your extended team accountable. Experian also has a growing list of agency partners who use the DPS to help clients like you shape and execute on effective marketing and advertising campaigns.

When dealerships market a particular make or model, they may only think of targeting by geography. In a previous article, we talked about hitting the mark for effectively geo-targeting down to the ZIP Code™ level. The trouble is this is only one half of the puzzle. You may know where you should target but might not know whom to target.  What is the best way to create campaigns tailored to the individuals within the specific area you are targeting? If you already use Experian’s Dealer Positioning System (DPS), you have a leg up on this. Since we already talked about targeting by ZIP Codes, the next step finding out household attributions and profiles in those areas. The above example is a ZIP Code in Sun City West, Arizona.  We see three different lifestyle segments sourced from Experian’s Mosaic®, a system that classifies households into 71 unique types and provides information about consumer’s choices, habits, and preferences. Within the 1,702 households in this Zip Code that registered a vehicle within a defined timeframe, we can determine the three primary types of household segments. As we can see, Footloose and Family Free dominates this area at 66%. This group consists of elderly couples and widowed individuals living active and comfortable lifestyles. Gold Carts and Gourmets, upscale retirees and empty-nesters in comfortable communities comes in at 20%. The remainder is Booming and Consuming, older empty-nesting couples and singles enjoying relaxed lives in small towns. This information gives us insight into the people living in various types of households within this particular ZIP Code and. These also show personal preferences for purchasing such as clothing, accessories, electronics, and so on, household marital status, and what types of vehicles they usually purchase. From this information, for Sun City West, Arizona, we can see that the average income in this ZIP Code is $67,000. After we look at the Mosaic profile of households, we can look at advertising propensity and channel dominance. These demonstrate how vehicles buyers in this ZIP Code were influenced in their purchase decision and shows what advertising influenced them the most. Traditional advertising such as newspaper, TV, or radio was more effective versus Direct Mail in this area with a ratio of 8:7. The difference between Email and Direct Mail for channel dominance is 1:1. That’s good because it means consumers here were equally responsive to both emails and direct mail. The left side of the table displays the type of households you can target, but the right side is all about how to best market to them. “Messaging Attributes” indicates the top key messaging that influenced the people in this ZIP Code’s buying decision. For this ZIP Code, Buy American is the top attribute. Consumers in this segment would like to know the history of your dealership, and details of your community involvement, and if your vehicles are made in America. If we go 9% lower, we see Look at me Now. This messaging focuses on customer relationships, dealership reputation, and gifts for going on test drives. Finally, there is On the Road Again. Here, focus is on customer testimonials, base trim levels of vehicles, and simple, value-focused messaging. As a dealer, you have three effective messaging attributes that you can use to bring consumers from this ZIP Code into your store. Effectively marketing your vehicle to consumers is easier once you know to whom you’re marketing. By using the Lifestyle Cluster and Mosaic lifestyle segmentation system, you can see not only who you are targeting but what kind of marketing they prefer. Along with idenitfying which ZIP Codes to target, figuring out what marketing attributes resonate with these consumers means you’ll provide the right message in the right place to the right consumer.

The auto industry has had an impressive recovery from the Great Recession and has enjoyed steady growth for the past seven years. After bottoming out in 2009 at 10.5 million new vehicle registrations, the industry has grown each year since, culminating in 17.3 million new vehicle registrations in 2016. However, the rate of growth has been slowing over the past several years, increasing just 1.03 percent from 2015 to 2016. While retail registrations were nearly flat, the growth came from fleet, with a 13.69 percent spike in registrations by government entities and a 5.59 percent increase in commercial/taxi registrations. When automotive sales growth begins to taper, hanging onto existing customers becomes more important than ever. Fortunately, customer loyalty in the auto industry is rising for manufacturers, dealers and lenders. The manufacturer loyalty rate through November 2016 was 62.8 percent, up from 59 percent in 2010. At the make level, the loyalty rate went from 50.6 percent in 2010 to 54.5 percent through November 2016.  Loyalty to a specific dealer is significantly lower but still on the rise, moving from 19.5 percent in 2010 to 23 percent through November 2016. Interestingly, 61.3 percent of all new vehicle registrations in 2016 were to customers 45 years old and older. Manufacturers and dealers who can keep these customers in the fold in the next several years are likely to maintain and grow their overall share. Our recent analysis also looked as how age impacts vehicle purchasing loyalty. In general, older customers tend to be more loyal than younger customers. Manufacturer loyalty rates by age include: 18-24 years old – 58.3 percent 25-34 years old – 55.4 percent 35-44 years old – 59.9 percent 45-54 years old – 64.4 percent 55-64 years old – 68.2 percent 65+ years old – 70.4 percent General Motors market share still number one For manufacturer market share in 2016, General Motors led the way at 16.91 percent. However, this is a significant drop from the 24 percent share of total vehicles in operation (VIO) enjoyed by GM. Toyota was second in manufacturer market share at 15.46 percent, followed by Ford Motor Co. at 12.59 percent and FCA US at 11.77 percent. Honda rounded out the top five manufacturers at 11.19 percent. For manufacturer customer loyalty, however, Tesla came out on top at 73.6 percent, followed by Toyota at 68.7 percent and Subaru at 66.8 percent. Ford and GM round out the top five at 65.7 percent and 64.7 percent respectively. Pickup trucks claim top model share, loyalty rankings Pickup trucks again held the top two positions among the most popular vehicles, with the Ford F-150 at 3.06 percent and the Chevy Silverado at 2.61 percent. Honda claimed the next three spots with the Honda Civic (2.53 percent), the Honda CR-V (2.46 percent) and the Honda Accord (2.37 percent). While the F-150 and Silverado were the most popular models, their competition led the way in customer loyalty. The Ram 1500 full-size pickup truck had a customer loyalty rate of 50.9 percent, followed by the F-150 at 46.3 percent and the Lincoln MKZ at 43.9 percent. In other trends: Non-luxury small CUV/SUVs were tops in segment market at 17.81 percent, followed by non-luxury mid-size sedans (13.89 percent) and non-luxury mid-size SUVs (13.22 percent). Tesla led the industry with a Conquest/Defection ratio of 13.77 to 1. 4-cylinder engines overtook 6-cylinder engines as the top engine type, 38 percent to 37.4 percent Vehicles in Operation are expected to reach 292 million by 2020 For more information on how to drive customer loyalty rates, visit Experian Automotive.