Professional Community for Automotive Marketers, Car Dealers, OEM and Suppliers
[This is part five in the "What's the Big Deal With Data Anyways?" series. Click here to read part four.]
Segmentation of DMS data can be defined as the process of dividing up your customer data into specific groups for the purpose of defining a more precise behavioral profile that will lead to a predisposition or higher purchase rate for a specific offering. Data Segmentation is when you break your customer base into groups and identify generally when, why and how a customer interacts or engages with your dealership. Did they previously respond to a specific product or service offering? Do they prefer a certain model? Did they stop purchasing? Do they only respond to discounts or price incentives, or do they only purchase a singular item from you?
The real goal of segmentation marketing is to deploy profitable marketing communications based on behavioral patterns exhibited previously by your customer. Segmentation is not just for the retail customer, but can be used in all of the dealership’s departments. For example, BMW has a program solely for independent body shops to increase the sales of certain OEM replacement parts purchased through their dealer network.
Data segmentation allows a dealership to focus on the customer segments that are strongest and to put less emphasis on those that are weaker.
Data segmentation will provide a dealership with, at a minimum, five basic insights into its customer base which will allow it to build a framework for segmentation campaigns as follows:
So what segments would could you potentially extract or filter from the volumes of customer DMS data you have already gathered? Think store wide, departmentally, and what each department offers in the way of all products and services.
By starting with some basic data filters, you can build some very specific marketing groups, singularly or by grouping multiple filters:
The basic frame-work for a successful data segmentation and subsequent marketing initiative should not be daunting. Actually it can be very simple if you start small.
By utilizing a more customer-focused approach, and by shifting resources away from the typical “shotgun” style mass marketing used by many dealerships today, you will be able respond more quickly to any market changes. This is while focusing foremost on your best customers up front while increasing profits and decreasing costs.
When deploying such a strategy, ensure that everyone in the dealership is on the same page when interacting with a customer who has responded to one of your segmented communications. This includes receptionists, BDC or call center scripting, service writers and sales employees. It is extremely important that all customers receive the same messaging, tone and product or service positioning that was offered in the communication. The more consistency you employ, the higher your ROI will be. To your success!