Research suggests that the cost of obtaining a new customer can be from five to 25 times the expense of retaining an existing client. Additionally, improving customer retention rates by as little as 5% may increase profits by as much as 25% to 95%. Retaining customers is one of the most valuable uses of a dealerships time and resources, and CRM Data holds the key to preserving and enticing your current customer base. Acquiring a new customer is an investment, making it vital to keep existing clients happy, and there are four types of dealership data known to boost ROI for dealership customers.
1) Demographics and Firmographics
Most dealerships collect demographic data for individual customers, such as age, race, sex, education, income level, and contact information, on a daily basis. Firmographic data, or firm demographics, refer to organization or business characteristics and include information such as the number of employees, type of industry, and revenue. Demographic and firmographic data change rapidly, making it crucial to ensure accuracy and consistent updating of dealership data.
While many marketing efforts use a shotgun approach, attempting to reach the masses, effective marketing involves reaching out to individuals and building relationships. Both demographic and firmographic data enable dealerships to target sales and marketing efforts to specific groups of individuals or companies.
Demographic data reveals who your target market is, while psychographic information explains why your customer decides to buy. Psychographic information involves an analysis of the customer's interests, activities, opinions, hobbies, values, and spending habits. Psychographic data gives a more profound understanding of the consumer's personality, likes and dislikes, enabling marketers to make fundamental assumptions regarding an individual's buying habits.
A thorough analysis and understanding of demographic and psychographic dealership data will create a detailed customer profile of current and potential clients. Once you understand what is relevant to your target audience, you will discover marketing strategies to find and motivate that audience.
3) Behavioral Data
Behavioral data is information produced as a result of actions including buying history, personal preferences, ratings, reviews, and social media likes. Behavioral data allows marketers to move past the assumptions in buying habits afforded through psychographic data and see the consumer's actual buying trends.
Technology has made today's consumer more informed and knowledgeable while also exposing them to a flood of mass marketing and impersonal advertising messages. To attract and keep the attention of your target audience it is critical for dealerships to develop appropriate, personalized marketing messages. The combination of demographic, psychographic, and behavioral data allows for the delivery of a highly personalized marketing message based on information relevant to the buyer.
4) Life Event Triggers
Sending the right message to the right customer at the perfect time is an essential part of any successful marketing strategy. A significant life event, such as marriage, a new home, or the birth of a child changes an individuals lifestyle, creating specific needs for consumers and opportunities for dealerships.
While a sports coupe might be perfect transportation for a single person to come and go as they please, it may not be the ideal vehicle for a newly married couples weekend getaway. The birth of a child makes the trusty pick-up truck less than practical when faced with a car seat and the extra baggage that accompanies a newborn. All of these events create a notable change in a consumers lifestyle and sales opportunities for well-positioned dealerships.
Lifecycle marketing, or a consumers association with your brand and dealership, often begins with a life event trigger. Paying close attention to life events helps to establish communication in the early stage of the customer's lifecycle, opening the door to lifelong relationships and creating a customer for life.
Technology has changed the way automotive dealerships operate with over 90% of buyers researching vehicles online and visiting several websites to compare pricing and options before visiting the dealership. Automotive dealerships collect a variety of customer data, much of which never gets used, leading to lost opportunities. Finding, understanding, and using all collected dealership data will improve the effectiveness of your marketing strategies and increase customer retention. With a solid foundation of demographic data already available, the addition of psychographic and behavior data can improve your marketing message, creating opportunities and increasing profits.
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