With Big Data and analytics having been the hot topic over the past couple of years, many dealers are recognizing that they can increase the effectiveness of their marketing. Many dealers, however, outsource much of their digital marketing to vendors that sell them on the use of their data to achieve this. The problem is that most vendors don’t really use it as they say they will. Let me explain.

Dealers realize that sending the same message shotgun-style to their entire database is a bad idea. Many don’t have time to do their own data analytics so they rely on vendors to do it for them. Most vendors actually practice segmentation vs. deep analytics. They will separate service customer versus sales customers and create separate lists. They may even go a little deeper than that and add more filters like time to generate the lists. While this segmentation strategy will increase responses, it pales in comparison to what is possible with the proper use of Big Data and proper analytics in a marketing strategy.

The goal is to deliver the right message to the right customer at the right time. Simply sending a service customer who hasn’t visited your store within 6 months an oil change coupon isn’t effective. Dealers should understand that there is much more data available when you dig deeper that can dramatically increase conversion beyond simple segmentation.

A recent study by Razorfish in collaboration with Adobe it revealed that “76 percent of marketers surveyed are unable to convert behavioral data into segmentation analysis and targeting execution. And of the 24 percent who are using behavioral data, less than 20% have the technology, creative execution, and integrated data to deliver a targeted experience to a recognized customer across channels.”  That’s a huge gap between the can-dos and the want-to-dos.

The fact is that while many vendors say they use big data, most don’t. They simply don’t have the technology or resources to combine your database with transactional and behavioral data along with predictive analysis to not only target customer more effectively but also before they even know they need the service or product you’re marketing to them. With proper analysis of your data, you can create a target list based on each individual’s behaviors as follows:

Let’s say you want to identify customers who have defected from your dealership. A basic segmentation may target customers who have been inactive for 12 months or even 18 months or greater. The reality is each individual customer is unique and should be treated as such. A customer’s purchase behavior that drives 10,000 miles per year is drastically different from someone who drives 20,000 miles per year. It is very difficult to produce a high ROI when doing basic segmentation.

Most dealerships have an incredible amount of data that can be analyzed. Service and sales transactions can be analyzed for frequency, recency and dollar values.  With this data, an analyst can cross reference against demographic data and begin to build models of customers with the highest propensity to respond and buy from you again. True analytics allows you to identify the absolute best target list and eliminate people not likely to respond. This lowers your overall marketing investment and produces a higher return on investment.

Not all analysts are created equal. A great analyst should be able to take this new “defector” target list and look for insights into what were the behaviors and patterns that these former customers had before they defected. Imagine what it would do for your customer loyalty to be able to predict customer defections before they actually leave you!

These lists would make for a great customer to target with a free vehicle inspection or car care clinic.  More than likely most of these “lost customers” are doing business with independent shops.  The above is certainly a very deep dive into big data and the more you trust the data the more successful your campaigns will be.

Large retailers are tracking everything about their customers and have evolved to the point where they can identify major life changes before they even happen. By having the ability available to you to utilize your data in combination with other data to create incredibly detailed and targeted marketing campaigns, dealers will find their ROI skyrocket. By being able to identify people who are about to buy a car before they put in a single Internet lead or inquiry, you’ll be able to get their attention before the noise of your competitors hits them. And, in the words of Grant Cardone, if you’re not first, you’re last.