By Adam Pavkov, Client Partner, Facebook
No industry is immune to the fundamental changes occurring in consumer purchase behavior and the heightened expectations surrounding the new retail shopping experience. However, there is certainly good news for dealers — or at least available opportunity for those willing to update their marketing strategies in pursuit of increased profitability in the evolving retail landscape.
Those that embrace the opportunity and engage customers with impactful messages that are both relevant and personalized, will delight the next wave of shoppers.
To understand the opportunity, let’s start with a quick look at today’s connected consumer.
Netflix has over 5,500 titles available on its platform in the US. Despite all those options, 80% of the programs consumed by the average subscriber comes from Netflix’s recommendation engine(1). In short, Netflix knows what you like — and you agree.
At one point, it was estimated 35% of all Amazon’s transactions came from algorithmic product recommendations.(2) Before check out you see the prompts — do you also need batteries, a case, these cables with your purchase? At least a third of the time, the answer is yes.
Think about it this way: What percent of your single-service scheduled appointments result in a multi-service visit after a technician inspects the vehicle? What impact does that have on the profitability of the back of the house?
Regardless of the answer, advertisers need to know that a majority of consumers expect companies to anticipate their needs and make appropriate suggestions(3).
Relevance in advertising is both impactful and expected — and ultimately profitable.
With an understanding of what your customers expect, what steps can dealers take to add another layer of intelligence to their current marketing strategies? How can they make their messages personalized and helpful to their audience?
It all starts with activating the sales and service information dealers already have on their customers. Gaining an understanding of how that wealth of insight can be used to develop your own always-on, dynamic recommendation engine will be the foundation for your dealership’s updated loyalty and retention program.
Finding the appropriate touch points to message your audience and encourage them to come in between purchases will directly affect a dealership’s bottom line.
One, we know that 70% of people who purchase a vehicle from a dealership do not return to the same dealership. But yet, three out of four people who return to the dealership of purchase within 12 months said they would likely buy their next vehicle there(4).
Two, 65% of vehicle owners have their vehicles serviced outside the dealership(5).
In the short term, the goal of your loyalty program is to help capitalize on opportunities to capture additional revenue. Think about cross-selling services during maintenance, repair, or warranty service visits. What percentage of your customers are potentially eligible to swap keys? What’s your service lane selling strategy, and how valuable is that incremental visit?
The average service department accounts for nearly half of a dealership’s gross profit with margins up 10% in 2018(6).
In the long term, the success of the program helps dealerships build upfront loyalty that will payoff downstream the next time that customer is in-market.
So, how can Facebook help with execution?
To start, you’ll first need to filter your customer relationship management data into a handful of pre-defined buckets that make sense for your dealership: sold not serviced, lease maturity, due for service, equity position, declined service, etc. Chances are you’ve already segmented these audiences or have your own custom buckets built already.
A dealership knows who bought, what they bought, and when they bought it. It is the identification or who, and when, that allows dealerships to deliver ongoing, personalized, and timely messages.
Dealerships can then use these customer and prospect details — such as email addresses, phone numbers, first or last names, zip codes and cities — from their own CRM database to create Custom Audiences. This information is completely anonymized, aggregated, and secured on Facebook servers.
If this data is continuously uploaded to the platform, these targets will automatically update. And as your customers become eligible for their next scheduled service for example, your always-on campaign will deliver the personalized message at the appropriate time.
What oil change offers are you running that you could put in front of an abandoned customer list? What dealer incentives would make sense to in-equity customers or those six months from coming off-lease?
Put some thought into which target buckets make sense and match it with a message that resonates with that custom audience. Then allow Facebook to be your new, cost-effective, and dynamic loyalty and retention strategy. Your Facebook advertising will help your dealership run campaigns that both align with your customer’s expectations on relevant messaging and drive meaningful and profitable outcomes for your dealership.
Source/Notes:
- https://mobilesyrup.com/2017/08/22/80-percent-netflix-shows-discovered-recommendation/
- https://www.mckinsey.com/industries/retail/our-insights/how-retailers-can-keep-up-with-consumers
- https://www.salesforce.com/content/dam/web/en_us/www/documents/e-books/state-of-the-connected-customer-report-second-edition2018.pdf
- https://www.coxautoinc.com/learning-center/2018-fixed-ops-study/
- https://www.coxautoinc.com/learning-center/2018-fixed-ops-study/
- https://www.nada.org/WorkArea/DownloadAsset.aspx?id=21474855962
About the Author
Adam Pavkov is a Client Partner on Facebook’s automotive Global Sales team, focusing on supporting partner growth and promoting effective advertising solutions for the retail auto industry. Prior to Facebook, Adam was Director of Product Management at Cox Automotive, working across both the product development and corporate strategy teams focused on developing advertising solutions and providing consultation for OEM and dealership clients. Adam has been in the automotive industry for 10 years and has helped develop ad products for Kelley Blue Book, Autotrader, Dealer.com and Haystak Digital Marketing.
