Using Predictive Analytics to Target In-Market Auto Buyers

The moment a car buyer steps onto a dealership lot, they typically think one thing: How can I get the best deal possible?

The buyer in an auto transaction has always been self-interested and eager to try to find the best deal possible. Now potential customers have more resources than ever before. Vehicle buyers typically research the make and model they are interested in and may have performed pricing comparisons online. The question becomes: how do you sell to a prospective buyer who has already made critical decisions ahead of time? That is where predictive analytics can come in handy.

How Does Predictive Analytics Relate to Automotive Marketing?

The way that an individual behaved in the past is a great predictor of future behavior. Predictive analytics allows automotive dealerships to act upon the information that prospective customers have already revealed about themselves via their actions. Automotive Mastermind explains:

Predictive analytics is the use of historical data to forecast future outcomes. This is done through a variety of statistical techniques involving data mining, machine learning and predictive modeling.

A savvy dealership will tap into existing databases of information about prospective customers to unlock key facts about those individuals and their needs when shopping for a vehicle.

Predictive analytics takes the guesswork out of automotive marketing and helps dealerships avoid putting out broad advertisements to their customer base. Instead of relying on broad appeal, a dealership can use predictive analytics to narrow down who is the most likely to purchase a vehicle at any given time.

Identifying True In-Market Buyers

Narrowing down which prospective buyers are truly in the market and which individuals are simply "kicking the tires" is something that has frustrated many dealerships. Fortunately, predictive analytics makes it easier than ever to work through this sorting process. Dealerships can access their customer DMS data and identify the high-value targets based on their likeliness to buy a vehicle.

Signals that someone might be serious about purchasing a vehicle can include:

• Service and Maintenance Patterns - The way that customers do or do not take care of their vehicles can be a factor in determining who is in the market for a new vehicle.

• Length of Current Vehicle Ownership - The amount of time that an individual owns their current vehicle is a big data point to look at when trying to determine when they are most likely to want to explore what is available.

• Lifestyle Indicators - There is also data within consumer demographics and lifestyle facts that may show if they are likely to be in the market for a vehicle at this time or not.

  
  

Why Direct Mail Works So Well with Predictive Targeting

Upon the identification of potential vehicle buyers, direct mail is a great tool to get their attention. Unlike digital marketing efforts, direct mail ends up in the home of the individual you are attempting to reach. A physical mailer is harder to ignore than a random e-mail.

Add to this the fact that direct mail can specifically appeal to the interests of the person you are attempting to reach. Simply plug in what you know about that person and send them a piece of direct mail that addresses their concerns and interests.

Improving ROI by Marketing Smarter, Not Broader

Something that will drain your marketing budget is spending excessively on people who are not ready to buy a vehicle. Casting a wide net and trying to approach marketing with the broadest possible campaign might seem like the right move, but it rarely is. Targeted marketing is the best choice. This means zeroing in on those who are serious about purchasing a vehicle and trying your best to get them to view your relevant inventory.

By sending direct mail only to those who are the most likely to buy, a dealership can:

• Increase response rates

• Decrease wasteful marketing spending

• Create higher quality showroom traffic

All these things matter when it comes to creating a marketing strategy that produces tangible results.

Personalization That Drives Action

Everyone wants to feel spoken to on a personal level when they are the subject of marketing efforts. Therefore, dealerships should strive to personalize the direct mail pieces that they send out whenever possible. A few ways to personalize direct mail efforts include:

• Focusing on new or used vehicles based on the individual's preferences and budget

• Highlighting a preferred vehicle type or brand

• Offering a wide range of financing options based on the budget and financial flexibility of the prospective customer

These are the types of things that help set direct mail pieces apart. They should speak directly to the concerns and interests of their target audience.

Supporting the Modern Buyer Journey

There is a gap between the digital vehicle shopping experience and the real-world experience. It is vital that dealerships focus on closing that gap as much as possible. Predictive analytics are an excellent way to help bring digital shoppers into the real world, finalize a purchase, and let the customer drive away with their new vehicle. Mailers may include modern tools such as QR codes to make it easier for prospective buyers to move back and forth between the digital and real-world.

In a competitive market, dealerships must think about how they can gain an edge. Sending direct mail tailored to the interests of their prospective customers is an excellent way to do this. It will help your dealership stand out among the competition.

At the end of the day, predictive analysis has changed the name of the game when it comes to direct marketing, and it will continue to do so. Now is the best time to tap into that and focus on creating targeted marketing campaigns that will reach your customers in ways that broad efforts simply do not.

Automotive dealership direct mail marketing is incredibly effective. Milestone Marketing Solutions is here to assist you with your direct mail marketing needs. We would love to speak with you to learn more about how we may be able to assist in creating direct mail marketing campaigns that produce superior results. Contact us and we will respond as soon as possible.