The ultimate goal of marketing is simple: Get the right message to the right person at the right time. But, how do you know who the “right” person is? This is a question many dealerships struggle to answer with confidence… or answer at all.
Data analytics studies raw data and provides information from the data that you can use to draw conclusions about that data. Data analytics can provide actionable insight into the customers your dealership should be targeting. You can analyze and segment your market in order to get the right message to the right person at the right time to yield the most conversions.
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Data analytics is of deep importance to dealerships who want to get the most out of their marketing. It’s the key to creating an effective marketing plan and it’s well worth the overall investment. Here are three ways good data analytics can boost your marketing efforts and increase your ROI.
Reach the right people through the most effective platforms.
Data analytics helps dealers understand which marketing platforms are the most effective for reaching their audiences and turning them into customers. For example, many dealerships focus on mass media marketing where they can broadcast their message on TV or radio and reach thousands of people. The idea is that the more people they reach, the likelier they are to catch the eyes and ears of potential customers. However, this isn't always true.
Data analytics identifies and predicts which customers are more likely to convert. Would you rather reach a thousand people and convert one person into a customer or reach five hundred people and convert ten people into customers through a successful digital marketing program? Data analytics will help your dealership look beyond impressions or audiences and into which programs work best based on price, leads, target market, and conversions, so you can invest in successful programs over others.
Customize your messages based on target demographic.
Another problem mass-media advertising buys is the lack of demographic targeting. Most people just know the gender, age, and income levels of the average viewer or listener. While this information is helpful, it's not specific enough to the needs of a dealership.
Data analytics can track in-market customers in your area and help you create a target audience who is more likely to convert. For example, by looking at customer information, along with third-party city data, a company might create three target audiences1 to approach:
- Customers who change cars every few years.
- Customers who prefer leasing rather than buying.
- Customers who have owned the same car for longer than average.
The brand message is completely different for each of these customers. The first and second customer might be convinced to buy because of new and exciting features, but the third audience cares about reliability and lifetime value.
Understand the costumer’s buying process.
Buying a car is a complex process that requires online research, multiple test drives, and even consultations with friends and family. The more car dealerships understand this customer journey, the better they can tailor their efforts and brand messaging to convert potential buyers. For example:
- What is the average time between a test drive and a purchase?
- What percent of customers that visit your website come in for a test drive?
- How many of your customers have returned after their first purchase?
By answering these questions through analytics, a dealership owner can increase the chances that a customer buys by increasing website response rates, improving the test-drive process, and utilizing reviews to engage customers. By improving these small performance indicators, the dealership can see an overall increase in potential buyers and sales.2