System Tells Who’s Ready, Willing, Able to Buy

MANHATTAN BEACH, CA – AutoNation Inc.’s Scott Zientarski says he doesn’t need to be told a rich 40-something guy going through a mid-life crisis might buy a Porsche.

And he knows that parents with lots of young children likely could purchase a minivan.

What he doesn’t intuitively know are the buying predilections of less-obvious consumers whose legions are large.

Yet there’s a way to get into those minds in a systematic way and on a massive scale, says Zientarski, AutoNation’s director of database marketing and analytics.

He oversees an AutoNation effort to take bits of customer information, available from an assortment of sources, run the data through a computer and come up with indicators of what people might buy and when.

That, in turn, allows AutoNation to spend its marketing money more wisely by concentrating on likely buyers, rather than bankrolling mass marketing that shotguns out to a lot of non-prospects.

It stands to be a useful scoring system for giant auto retailer AutoNation, which last year sold more than 620,000 new and used vehicles.

But it is a work in progress. “We’re doing a lot of things, but we have a long way to go,” Zientarski says at an E.N.G. customer relationship management conference here.

Raw data, alone, offers little value. But Zientarski says you’re on to something if you can take millions of pieces of data and cast them into useful buying indicators and profilers.

AutoNation crunches its own transactional data along with information from third-party sources.

“We have 11.5 million customer records,” Zientarski says of AutoNation, the country’s largest dealership chain, with 257 stores and nearly $19 billion in total annual revenues.

AutoNation’s own proprietary customer information ranges from new- and used-vehicle sales transactions to auto financing to service repair orders –

“even though we’ve found that auto technicians can describe an oil change in 55 different ways,” Zientarski says.

Auto-loan information, in particular, offers key data as to when a household might be in the buying mode, he says.

Among outside sources AutoNation pays for information is a firm that determines if customers still are living at the same addresses as when they bought or serviced their vehicles.

Many people move without filling out a change of address form, Zientarski notes. The tracking firm uses utility bills, magazine subscription lists and the like to determine if addresses of record are current.

It’s not cheap to validate thousands of addresses in a mobile society. “But neither is first-class mail going to inoperative addresses,” Zientarski says.

In-house and outside data sources offer valuable information on demographics (age, income and current vehicle), lifestyles (travel records, magazines subscriptions, organization memberships) and in-market possibilities (service records, age of vehicle and keyword searches).

“Big brother absolutely is watching,” Zientarski says.

To show the success of target marketing, Zientarski cites two different marketing efforts and their respective results.

The first campaign was an indiscriminate mailing to 103,070 people. It resulted in only 94 sales, costing an average of $998 each in marketing expenses.

The second mailing went out to 245,910 individuals deemed analytically as likely or somewhat likely to buy. The results: 1,008 vehicle sales with an average of $228 each in marketing costs.

“It’s a question of determining who is ready, willing and able to buy a vehicle,” Zientarski says. “It boils down to that. Is it the right time to make them an offer? Knowing that really reduces your marketing PVR (per vehicle retailed).”

Such knowledge is particularly important in economically challenging times such as these, he says.

Zientarski notes that longer auto-financing terms, declining home values and deteriorating credit quality keep a lot of people out of the vehicle-buying market for longer periods.

Getting a sense of who they are and then passing over them, saves dealership marketers time and money.

It also is important not to waste efforts – or create customer bewilderment – by unwittingly delivering pitches to recent buyers.

“There is nothing worse than sending sales material to someone who just bought a car from you,” Zientarski says. “Good marketing is all about relevance.”

He says he believes in using a scientific approach at AutoNation, and that showing the results of systematic marketing turns many skeptics into believers.

“But there always are some disbelievers who say, ‘Oh, you can say anything with numbers.”

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