Data Collection Key to Dealer Marketing, Sales

LAS VEGAS – “Big data” is the big buzzword at the Driving Sales Executive Summit here as dealers look to place as much emphasis on mining customers’ buying habits as the actual products they buy.

Speaking to a crowd of hundreds, Florian Zettelmeyer, a leading marketing professor at Northwestern University, advises dealers to look toward data-hungry corporations such as Amazon and Target for increased sales results.

Target, for example, began tracking purchases of women it thought may be pregnant and began sending coupons for diapers and other infant needs around the time of the estimated baby delivery.

While car dealers don’t have to pay attention to whether a driver purchases a blue or pink rug, Zettelmeyer says the key is to learn a customer’s pre- and post-buying activity.

“Marketing using big data has become all the rage,” he says. “We’ve moved away from transactions and physical purchases into clicks, physical movements and networks.”

Car buyers who shop online are far more savvy about incentives and other discounts, and that demographic is growing,” Zettelmeyer says. “People who shopped on the Internet paid on average 1.5% less than offline shoppers.”

To keep dealer profits flowing, Zettelmeyer suggests disclosing more information at invoice and recover some costs on the back end with finance and insurance.

“Selling a car provides multiple profit opportunities,” he says. “Generally, consumers aren’t aware that the only thing that matters to dealers is the gross margin.

“Consumers are more profitable towards the back of the deal. Consumers can’t be good for the front-end gross, because we’ve just made it that much harder. It should all show up in the back gross of the deal. The trick is that we approach this problem of customer information with a big-data mindset. We design processes around pre-purchase and post-purchase.”

Rather than a one-size-fits-all approach for drivers, Zettelmeyer points to gambling casinos such as the Bellagio. While the Bellagio may target a higher-end customer, Harrah’s may target a middle-income customer, he says.

“The promise of the big-data mindset cannot be fulfilled without rethinking marketing. We are going to treat these customers like kings, because we know what they are worth.”

Dealers also need to develop continuous insight into the consumer mindset, collect data at every phase of the transaction, perform research and development everywhere and acknowledge that there may be no revenue implication.

“By testing everything, they are able to move away from what they think is right to what they know is right,” Zettelmeyer says about companies who excel at data mining.

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