Tag: ZIP Code

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.