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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.

 

recent study by Razorfish in collaboration with Adobe 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.

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Tags: Adobe, Cardone, Grant, Razorfish, analytics, automotive, behavioral, campaign, consumer, data, More…dealership, demographic, digital, marketing, message, multichannel, purchase, retailer, segmentation, targeting, transactional

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Comment by Alexander Lau on May 14, 2014 at 6:01am

http://bit.ly/1qCCRTY @ Lindsey and Ralph. Goes along with your points.

Comment by Alexander Lau on May 12, 2014 at 7:48am

Great comment Ralph! I agree completely. Additionally, there's a reason the JS tag contains 'UA-#######'. the UA stands for Urchin Analytics.

As far as behavioral science, I've been interested in 'Instructional Design: https://en.wikipedia.org/wiki/Instructional_design' for some time and before I left working for Carnegie Mellon University, I was taking classes on it, one of the first universities in the world to teach the concept. In other words, how do we create interfaces that lead to better user experiences in order to promote conversions. I can tell you, there are very few automotive website providers taking this into consideration:

Instructional Design (also called Instructional Systems Design (ISD)) is the practice of creating "instructional experiences which make the acquisition of knowledge and skill more efficient, effective, and appealing." The process consists broadly of determining the current state and needs of the learner, defining the end goal of instruction, and creating some "intervention" to assist in the transition. Ideally the process is informed by pedagogically (process of teaching) and andragogically (adult learning) tested theories of learning and may take place in student-only, teacher-led or community-based settings. The outcome of this instruction may be directly observable and scientifically measured or completely hidden and assumed. There are many instructional design models but many are based on the ADDIE model with the five phases: analysis, design, development, implementation, and evaluation. As a field, instructional design is historically and traditionally rooted in cognitive and behavioral psychology, though recently Constructivism (learning theory) has influenced thinking in the field.

Comment by Michael on May 11, 2014 at 9:23pm

Jamil,

Thank you for the fundamental clarification of personalization/customization in targeted marketed emails from dealerships. Otherwise as traditional marketing goes=Shotgun approach

Comment by Ralph Paglia on May 9, 2014 at 5:09pm

The Real Story on How Google Analytics Got Started

Written by Celine Roque

There’s nothing small about Google Analytics. After all, it’s used by around half of the world’s most popular websites.

While current startups are still dreaming of the day when they can use the phrase “market share,” Google Analytics already has the largest market share in its industry.

But this is far from how it all began. Before being acquired by Google, a small web consultancy team created a product called Urchin. This is the story of how they made it big.

Where it all started

In 1995, the founders of Google Analytics built a company called Web Depot, which provided web development and hosting services to San Diego businesses. It had four co-founders: Paul Muret was both the CEO and the engineering/technical end of the company, Jack Ancone was the CFO and brothers Brett and Scott Crosby took care of business development and sales.

Two years later, Paul wrote the first version of their analytics software, Urchin. It was planned to just be part of their services until he had a lightbulb moment:

“One of our large clients was struggling with the fact that it took 24 hours to process a single day’s worth of website tracking results. We tried out our new analytics tool, and it took 15 minutes to process the same data. That’s when the light bulb went off – that Urchin was for real.”

So the team were faced with a choice: keep providing web consultancy services, or pivot and focus on building and selling Urchin?

They chose the latter and slowly moved away from doing hosting and development work. It wasn’t an easy process, but it was a move that paid off in the long run. As Brett Crosby said:

“We built our business around a very scalable product, which allowed us to do things like target hosting companies and get massive numbers of users with one deal, rather than focusing on one very complex deal.”

As they started landing top web hosts as customers, Urchin quickly became the standard analytics software for thousands of websites.

As a result, it didn’t take long for Google to notice them.

From Urchin to Google Analytics

When startup founders attend trade shows, there are some common things they expect to achieve. Get new customers. Generate interest about their product. Or if they’re really lucky, bring in some new investors.

So when Google representatives approached the Urchin team at a trade show in 2004, it’s likely that the encounter was beyond anything they expected at the time. An offer was made, and negotiations began, which would take several months to wrap up.

The deal eventually went through on Brett Crosby’s wedding day on March 2005.

“I was in my tux, literally just about to walk down the aisle when I signed the contract,” he recalled in an interview.

Where Are They Now?

After the acquisition, Urchin’s web-hosted analytics software, Urchin On Demand, became the Google Analytics we’re now familiar with. Their client-hosted version, simply named Urchin, was rebranded as “Urchin from Google”.

But more than just the product names changed after the acquisition.

Paul Muret became the Director of Engineering at Google Analytics. After spending more than a decade working on the product, he gave his first keynote speech during the Google Analytics Summit last October.

Jack Ancone became the Senior Director of New Business Development at Google.

Brett Crosby is now the Director of Product Marketing at Google. He also sits on the board of directors at Euclid Inc., which provides in-store consumer analytics for retailers.

Like the other founders, Scott Crosby also worked for Google as Senior Program Manager after the acquisition. Upon joining Google he made 2 key decisions: to live in San Francisco and not drive to work. So with his brother Brett, he founded SF2G, a community that promotes cycling to work. He left Google in 2010 and is also now the COO of Euclid Inc.

As for Urchin, while its web-hosted version lives on as Google Analytics, the client-hosted version wasn’t so lucky. Though they released 3 more version upgrades since the acquisition, sales for Urchin software were discontinued on March 2012.

And the moral is…

Google Analytics has a history that’s as long and as colorful as the reports it generates. Even if its startup days were over a decade ago, there are a few things up and coming entrepreneurs can learn from this story.

Startup Lesson #1 – A successful idea doesn’t need to be unique or flashy. But it has to be useful.

The Urchin team’s “big idea” wasn’t their development and hosting services, but the analytics tool they developed to process website tracking results.

Analytics software isn’t really the first thing that comes to mind when you try to think of a product idea that could change the world.

But the thing is, they did change the world – at least online. They provided something faster and more user-friendly than what was available at the time, which became the widespread standard.

Startup Lesson #2 – Recognize your opportunities for pivoting.

Sure, Urchin software could have been just another feature in their web hosting and development services, but if the team had persevered with their original business plan, they wouldn’t have realized the full potential of their new product.

Some Things Don’t Change

It’s clear that whatever they pursue, the founders of Google Analytics are still passionate about empowering people by giving them easy access to important data. The Crosby brothers are still working in analytics, only now it’s for brick-and-mortar retail interactions. And Paul Muret is still working on the product he’s been building all these years.

While there are lessons to be learned, the history of Google Analytics proves how successful you can be despite hurdles, pivots and taking risks, which is encouraging for those of us in the early chapters of our own startup stories.

Comment by Ralph Paglia on May 9, 2014 at 4:54pm

Lindsey, your father is a wise man to have a Behavioral Psychologist managing the dealership's digital marketing strategies... An understanding of human behavior and the psychology behind purchasing behaviors is priceless when it comes to attracting car buyers and service customers.

Comment by Ralph Paglia on May 9, 2014 at 4:52pm

Alexander's comment has a lot more background story than many realize... For example, Google purchased a company whose web visitor tracking products (Urchin) then became "Google Analytics". At the time, two other companies dominated the analytics reporting business in the auto industry, one was "WebMetrics" and the other was "SiteCatalyst. I started out doing automotive digital marketing in the mid 90's as a fan and user of WebMetrics, later on, after I became familiar with the customization capabilities, I became a user and supporter of "SiteCatalyst" from Adobe... To this day, I believe that SiteCatalyst is a superior product to Google Analytics...

However, when Google bought Urchin and then announced that they would give it away for "Free", that was the first time I really learned the power behind software "Terms and Conditions" that meant free really isn't free...

"Today, I try to avoid anything software or app related that is marketed as "Free" because not all costs are paid with money, but only those expenses that are clearly priced in US dollars are the one's whose true costs are known." --Ralph Paglia

In many cases, the Terms and Conditions that accompany so-called free software, including Google Analytics, are where the company providing such software gains the right to sell your dealership's data to thrird parties for considerable profit.  Like I said, just because the software has a price tag of "$o.00" does not mean it is "Free"!

Comment by Lindsey Shaker on May 8, 2014 at 2:14pm

I think this is why my family finally took the plunge and put me in charge of digital..... I love data, but because of its truest purpose. Usability. Why? My background is in clinical/behavioral psych. I know people, and I know big data. I am pumped to make it realllllllll

Comment by Alexander Lau on April 11, 2014 at 6:55am

It ain't Google Analytics (they've just duped most into believing it's great), I can tell you that much. Passive Analytics is your answer, but tags have dominated, because of the ease of use and prevalence in the market.

Companies really should be using a tap and passive analytics, such as http://www.metronomelabs.com/products/explain.php.

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