Powerful Personalization Hits Auto Industry

Giving customers the personalized touch always has been good business.

Think of the friendly general store owner who knew granny’s shopping list by heart.

The Internet may have changed a lot of things, but it hasn’t changed the power of personalization.

In fact, the Internet has taken it to a new level. Online businesses such as Amazon and Netflix know what their customers want and pitch to them accordingly. It pays off.

Now, the auto dealers are doing the same thing. They are using cookies to track buyer behaviors, create a customer profiles and deliver relevant online information to online car shoppers.

Automotive information-technology provider CDK ambitiously is involved in that effort. Its president, Bob Karp, and chief marketing officer, Linda Bartman, discuss how dealers can get personal with customers in the best possible ways.

Here’s an edited version of the Q&A:

WardsAuto: Digital personalization used to be slapping someone’s name atop a blasted email message. What is it now?

Karp: There are multiple elements. On the advertising front, it’s the ability to attract the right customer with the right information. And when they come into the digital storefront, the relevant information is served up to them.

We know statistically that if you personalize that information, their engagement goes up 53%. If you deliver the specifics about vehicles they have been looking at, the engagement goes up dramatically.

If you are searching through the whole digital ecosystem, and if you are really interested in pickup trucks, then we want to reflect our knowledge of that at the digital storefront, and serving you information on that.. You will engage more deeply and rapidly because we are communicating with you about something you are interested in.

Bartman: We’re also taking our DMS data and looking at a consumer’s profile. So if that person has just bought a new car from a dealer and then goes to the dealer’s website again, we don’t serve that shopper an offer for a new car. We might say, “Let’s book an appointment for your 5,000-mile checkup.”

Consumers come to expect this. It builds a better relationship and retains customers. Those powerful profiles help.

WardsAuto: Worst case scenario would probably be if people just bought a car, and you send them an offer that’s better than the one they had. It can be less drastic than that. For instance, if someone just got an oil change and you send them an oil- change coupon, it dilutes the personalization.

Bartman: That’s exactly right. We’re trying to give our dealers an ability to connect with customers. We also want to change perceptions so that consumers feel good about that relationship.

WardsAuto: What’s the perception that should be changed?

Bartman: There is a perception by consumers that the auto industry is not changing as quickly as they would like, compared with other industries. We’re starting to bring that to auto so they get the same experience as they would get on Amazon.

Karp: We want to enable the dealer to offer a brand experience so customers come to them and stick with them. These tools will do that. The customer will stay if the experience is personalized, efficient and meets expectations. If dealers don’t provide that, they’ll have defections.

WardsAuto: Is there a built-in flexibility to prevent this: If someone is looking at, say, Jeeps, but hasn’t narrowed the decision down to Jeeps, and may switch to something else, yet the system is only sending them Jeep stuff.

Karp: They can absolutely still do a search and look at the rest of the inventory. This is just serving it up and speeding up the process. Consumers are interested in speed. The time for customers to buy cars is too long. Everyone acknowledges that.

WardsAuto: This may be an extreme case, but wonder if someone is looking at a Jeep and a Chrysler 300 sedan – two completely different vehicles. What sort of marketing information does the system send them?

Karp: We would probably serve both up. The way we enable personalization is to look at the totality of the information that we are able to get from following the customer. And then we’re able to put some intelligence to it.

WardsAuto: In terms of taking the technology to new levels? Is this what the customer wants and you are reacting to it or are they seeing it and saying “Oh, this is cool, I wasn’t expecting it though?

Karp: To Linda’s point earlier, this is the consumer experience that most people have today in a variety of interactions. The expectation is they are going to be served up well with information. The expectation is they will go really quickly through the process.

Bartman: If you do it well, if you know what a customer is interested in and searching for, and you provide relevant information, people are pleased. It gives them a better feeling about that brand. It’s a better experience.

WardsAuto: Is it harder to do with cars than with Zappo shoes?

Bartman: It’s all about the technology and how it is built. There is smart technology. Every time a customer takes an action the system builds a profile and then we get that content just right.

WardsAuto: Statistically when Netflix recommends a movie to a customer, the viewership of that movie goes up. Netflix recommends something, so it’s watched. What is the dynamic of that?   

Karp: Because they know your tastes. For example, I like political dramas. Netflix knows that about me. So when I log on, the first thing they show me are political dramas. The likelihood is that I am not going to search the entire video library. I am more likely to pick one of their recommendations.

Bartman: I have to admit it, I like superhero movies. They will recommend programming like that and I’m thrilled that they do. They know what I like. It saves time. And I feel they know who I am.

Karp: I’d add there is a pretty significant demographic shift happening in car buying. By 2020, about 50% of car buyers will be Millennials. This is their experience. This is what they are used to and expect. Those who are able to fulfill those expectations will have loyal customers. Those who do not will have defectors.

WardsAuto: What about the older consumers? Do they want to do it the old way?

Karp: We have a unique moment in time where we have four very distinct demographic groups co-existing. The kind of seniors, the Boomers, the X’s and the Y’s. They all handle things differently. The dealer needs a flexible process to deal with those multiple generations.

WardsAuto: Wait until Generation Y comes to the market.

Bartman: It’s the hologram generation.

Karp: They call that the “I” generation. “I” as in iPad. These are kids born in the late 1990s or around 2000, and they grew up with Apple devices. So they are the generation that will walk into dealerships and put on the virtual reality goggles.

WardsAuto: Will they expect a different online experience?

Bartman: You have to continue to change when you see the behavior change. We are just starting to look at the future of that generation and where they are going to be. We have to plan for that.

Karp: It is Snapshot versus Facebook.

WardsAuto: Were you kidding, Linda, when you mentioned the hologram generation.

Bartman: I was being kind of far out there, but the point is, if you asked me 15 years ago, where we would have been today, a lot has shifted and you have to be flexible when thinking about your business model. Consumers are driving this. And you have to think about all these different generations.

Millennials will get turned off if you don’t deliver the expectation, and that can really affect the brand.

WardsAuto: What is the primary expectation?

Karp: People say Millennials are not loyal, but research says they are. They are not necessarily brand loyal. They are process loyal.

WardsAuto: What’s that mean?

Karp: It means rather than saying, “I bought a Ford so next time I’ll buy a Ford,” they are saying, “I bought the Ford, and I had this positive process experience, and that is what I am loyal to, so I’ll go back to that.”

WardsAuto: Are dealers adjusting to all this?

Karp: Absolutely.

WardsAuto: Do you have the typical bell curve of adoption?

Karp: You always do. You have the early adopters and the ones slower to adopt. We are moving to the adoption curve on this particular point incredibly rapidly because dealers know there is a lot of energy in the online marketplace. We are now into a connected experience. The brick and mortar and the virtual experience are now the entire dealership experience. The boundaries between the two are dissipating.

WardsAuto: Which is more important?

Karp: They are connected. It’s important that the virtual experience has to be the same as the experience they have when they walk into the store.

[email protected]