How AI Enhances Data-Driven Marketing

Auto dealerships have lagged behind other retail industries in their usage of data-driven marketing.

It is understandably difficult for small to midsize companies to have the resources to access and analyze their data, let alone incorporate it into their marketing strategies. As a result, most dealers continue to do the same old generic email blasts and postcards to large segments of their database.

For resource-challenged dealers, one of the most promising developments in 2022 is the incorporation of artificial intelligence into marketing strategies. By now, most dealers have a basic understanding of how AI can be used to support employees and automate processes.

But did you know AI can also be used to leverage customer-relationship management (CRM) data to create targeted and personalized marketing campaigns?

AI + Data = Marketing Success

According to PricewaterhouseCoopers’ “Experience is Everything” report, 75% of U.S. consumers cite “experience” as a key factor in purchasing decisions. The most important aspects of experience are speed, convenience and getting the right information at the right time.

Data-driven marketing powered by artificial intelligence promises to deliver all three aspects of the optimal customer experience.

With a data-driven marketing strategy, customers are segmented into audiences based on a variety of data points such as income levels, zip codes, make/model ownerships, service history, website browsing history and more.

For optimal success, marketing campaigns should use several data points to create a narrow list of targets. The smaller the list, the more relevant the messaging. Following are specific examples of how AI can take data-driven marketing to the next level.

Inventory Acquisition

If you are looking to acquire specific makes and models for your certified pre-owned (CPO) program, you would want a list of customers who own those makes and models (that also have low mileage) and have been servicing their vehicles at your dealership. Once these prospects are identified, AI will send personalized communications to each individual using a multi-channel approach, increasing the likelihood of response.

AI can also access your equity mining software and do the heavy lifting of identifying and reaching out to customers with equity positions in their vehicles. When someone raises their hand, AI will hand them off to a salesperson.

Acquiring New Customers

Data can be used to identify your dealership’s most profitable customers and then develop “lookalike” audiences. Marketing to these consumers results in attracting more new customers with attributes similar to those of your current best customers.

AI can be used as a first-line responder to leads generated from these campaigns, and will communicate via email, chat or text in a very lifelike way until the lead is ready to be handed off to a salesperson. Fast, personalized responses increase campaign conversion rates.

Propensity to Buy

There is a reason that marketers’ use of AI jumped from 29% in 2018 to 84% in 2020, according to Salesforce Research’s recent State of Marketing Study.

One of AI’s most promising applications in marketing is its ability to analyze customer data, then determine a customer’s propensity to buy. Why waste money advertising to thousands of people when you can create a prospect list of active, in-market shoppers?

VIN-specific Vehicle Recommendations

A novel approach that can boost sales is to make VIN-specific recommendations to a customer, based on their data. Do you have a piece of inventory that hasn’t moved? Let AI mine your data, identify prospects who might be interested and send them a personalized email with a link to the vehicle VDP.

Dan Dulik Wards

Dan Dulik (pictured, left) is director of Product Marketing for the Variable Operations portfolio at CDK Global, which includes Elead CRM, F&I and Dealer to Dealer solutions.