By adding additional data, you can optimize your CRM to identify high-potential shoppers already in the database.
BY JOHN GIAMALVO
We live in the age of “big data,” and nowhere is this more apparent than in the wealth of information that auto manufacturers and dealerships hold in their CRM databases. CRM systems are chock-full of valuable data – from demographics to contact information – about current and potential customers. Now is a good time to optimize your CRM.
While most marketers in the industry already are leveraging their CRM data to good use, they often have difficulty distinguishing consumers who want to buy the car of their dreams from those who can comfortably afford it. It demonstrates the ultimate caveat of working with big data: There’s so much of it that it can be difficult to drill down and find granular insights.
While using a CRM gives a big-picture perspective about which consumers in a dealer’s market area might be interested in buying a vehicle, that does NOT identify those with the necessary financial capacity. This can lead to some very inefficient marketing, with money spent to reach consumers who might not be able to afford the particular brand or models on your lot and in your showroom. The last thing your staff wants to do is tell someone who came to your store that he or she CAN’T qualify for the offer that enticed them.
To improve the efficiency of marketing campaigns, your marketing team can access third-party data, such as estimated consumer financial information, to build a profile of your ideal customer. That profile then can be incorporated into your CRM system to facilitate more targeted marketing and optimized sales efforts.
Following is a quick overview of how to utilize your CRM in this way.
First, Obtain Necessary Data
Your CRM system already contains the basic demographics about consumers in your territory who are interested in buying one of your vehicles. Now, you need to merge in the insights you don’t have – regarding who may actually have the means to make a purchase. This level of information is available from third-party data providers that can enhance your CRM system with measures such as:
- Estimated financial capacity and buying power (i.e., an estimate of a household’s income and discretionary spending).
- Buying propensities (i.e., the likelihood your target customers are interested in various vehicle types, such as luxury models or green cars).
- Attitudes and behaviors (i.e., what vehicle characteristics, such as technology or fuel efficiency, your target customers likely prefer).
- Financing needs (i.e., how likely it is that an individual will respond to an auto finance offer).
By working this data into your CRM system, your marketers can start narrowing the field to identify high-value targets for campaigns.
Next, Profile High-Value Customers
Now that you have the additional data, your next step is to build a profile that identifies the potential financial standing, car-buying attitudes and purchase preferences of your existing customers. These customer profiles can be combined based on qualifying for a specific brand, model or vehicle type. At that point, a dealership then can use them to identify similar individuals from your prospect list.
Here’s what a possible profile could resemble, based on financial measures we’ve developed at Equifax:
- “Income360” – This measure identifies a customer’s estimated total income, including wages and income from assets. For example, crunching and combining the data may show that your best customers have a total estimated income above $150,000.
- “Discretionary spending dollars” – Here, we go one step further and identify customers’ estimated discretionary spending capacity. For example, this measure could indicate your best customers have more than $40,000 of discretionary spending capacity.
- “Economic cohorts cluster” – This measure segments your customers based on certain financial attributes, such as estimated income and credit, as well as general demographics, such as lifestyles and behaviors. For example, the data may reveal that your best customers seem to be suburbanites who prefer driving convertibles or sports cars.
Customer profiles such as these could even be constructed for an upcoming new model launch. Your dealership can be covered no matter what type of vehicle you’re trying to sell.
Then, Apply Profile To Your CRM
Once you’ve profiled your ideal customer, you can apply those attributes to your CRM system to identify consumers who are similar in terms of estimated financial standing and other characteristics. This will narrow down your pool of prospects to those high-value targets who are interested in buying and seem to have the financial capacity to do so.
Let’s say, for example, you have 500,000 consumers in your CRM database. By narrowing that number down to people who fit the demographic and financial profile you’ve built, you could market to as few as 5,000 highly qualified prospects. It all depends on how granular you want to go.
Finally, Market And Sell To Target Prospects
Step four is for your marketing team to direct their campaigns to the targeted prospect list you’ve complied in the CRM system. This is not to say you should be limited to an either/or approach in your marketing. But, you now can make better, more informed decisions. Your online and TV ads should be aimed at, and your direct-mail pieces sent to, those consumers who are likeliest to respond to your promotions.
In addition to more efficient marketing spend, there are several other benefits from this approach. For example, the financial profiles can help improve the way your dealership prioritizes leads. Whether leads come in by phone, e-mail, text or otherwise, your sales team can use the CRM to quickly determine whether that person should be prioritized as a high-potential shopper. They can even use tablets to review profiles directly from the showroom floor; imagine how that would help quickly and accurately match a customer with an affordable vehicle.
Meanwhile, salespeople could encourage certain customers toward a certified pre-owned vehicle by praising the program’s benefits.
This deeper understanding also can help your F&I office. For example, if someone is categorized as both a “buyer” and “service” customer, these insights can help the F&I team evaluate his or her ability to afford the incremental cost of pre-paid maintenance and extended warranty offers.
Parsing Your Current Customer List
In sum, this process is not about finding new marketing targets or changing your strategy, it’s about identifying the best consumers who already reside within your current CRM systems. All you need is some additional financial data to help filter the “lookers” from the “buyers,” depending on your marketing plan.
I like to compare this methodology to my most pleasurable experiences booking vacations, where providers seek me out by name, offer practical and affordable destinations, suggest restaurants and activities – all based on my previous buying behavior. That’s what keeps ME coming back, so why would you treat your valued customers any differently?
