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Know Thy Enemy (and then take as much business from them as possible)

I'm about to discuss data, which means that many will stop reading right about now. Data is boring. Data is the ugly side of marketing. Data makes my brain hurt sometimes, but I continue to look at it tenaciously for one very simple reason: data helps dealers sell more cars.

Let me be more specific so there's no misunderstanding: proper gathering of data from the right sources parsed into a way where courses of actions can be discerned helps dealers sell more cars. Data by itself is just graphs and numbers. Data applied properly can be utterly enlightening.

With all of the disclaimers out of the way, let's talk about the important data that guides actions. I'll admit up front that I have a horse in this race; the more data I have about a dealer, their customers, their competitors, and their competitors' customers, the easier it is for my team to deliver incredible results on search engines and through social media. Having the data is not required for us to install our marketing strategy just as NOZ is not required to have a very fast car that can win street races. In both cases, both the data and the NOZ act as boosters to make winning the race easier.

For dealers to know where and how to target their potential customers, it's extremely important to have a strong understanding of what's being purchased. Breaking it down by city is not enough. You need to look at it zip code by zip code which is why we have incredible success using String's DPS to guide our targeting. There are other methods, but this is the easiest for us and many dealers.

If you can know that 16 Honda Accords were purchased last month in a nearby zip code and you only sold 3 of them, you learn three things:

  • People in that zip code are buying Accords
  • They're going to your dealership 25% of the time, to your competitors the other 75%
  • Since you're one of the closest Honda dealers to that zip code, putting more marketing and advertising emphasis there should help you to increase your overall Accord sales

That's a simplified version that depicts the importance of data, but it's one that clearly shows the potential. In most cases, dealers and vendors will go for a blanket approach to their marketing. They'll advertise everything the can everywhere they can. It makes sense on the surface but it can be wasteful. Marketing and advertising come down to two things: total spend and spend efficiency.

That means that you have two choices: outspend the competition or outsmart the competition. The former is something that anyone can do and requires very little data. The latter is something that can only be done if you have the proper data in hand.

You don't have to spend more to get more. You don't have to sacrifice sales by spending less. Spend smarter, target better, and let the data guide you. Efficiency trumps the blanket approach every time in my book.

Views: 397

Tags: JD Rucker, analytics, data, location, marketing

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Comment by Jack Boland on April 23, 2015 at 6:26am

J.D.,

Thanks for sharing! I spend a great deal of time helping my dealer clients understand how data collected in analytics intersects with sales data. Depending on your analytics platform, you may not be able to drill down to the zip code level, but your sales data always includes that information.

Here's a quick tip:

Segment your sales over the past year by zip code to identify the most valuable areas, as you've suggested here.

Next, do some market research. Nielsen's PRIZM segmentation tool gives you a descriptive snapshot of a given zip code that includes demographic and psychographic information.

Use that information to build a mini-persona (real ones take a lot more research!) for each neighborhood's potential customers.

Build ads, landing pages, on-site content, and even social media messaging to reflect the interest and life stages of your best customers. Targeted messages and user experiences will help improve conversion rates across all digital channels, in turn decreasing your cost per acquisition.

That's the ~lite~ version, but feel free to reach out with questions!

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