The recreation and equipment industries are more competitive than ever, in large part because consumers have more choices, more information and more technology to guide their purchase decisions.
Especially for big ticket, big dollar, big deal purchases, consumers are doing their due diligence and shopping around to find the best deal and the best dealer.
While this new retail environment means more competition for consumers, it also offers an opportunity for dealers to do some research of their own to gain a distinct competitive advantage.
By embracing data-driven decision making in marketing, your dealership can overcome competitive challenges and make informed, strategic choices that drive growth, optimize operations and enhance your customers’ experiences.
This article will explore the critical importance of data-driven marketing decisions for today’s dealerships, and how your dealership can leverage data to personalize your marketing, target the right audiences, enhance your inventory management and improve your customer relationships.
Understanding Data-Driven Marketing
Historically, advertising and marketing have been mostly experimental fields. Marketers would use their gut instincts to pick channels, target audiences and create messages before finding what worked and what didn’t work. As technology and analytics have improved, “gut feel” gave way to a more considered, less experimental approach to marketing based on actual consumer data.
Data-driven marketing is the practice of collecting consumer data to inform advertising. This means applying consumer data to your marketing key performance indicators (KPIs) to better understand the correlation between your marketing strategies and consumer preferences. Over the years, new technology tools have made it much easier for marketers to leverage data to gain insights about their customers and discover trends about their behaviors.
These tools include web analytics, digital ad platforms and reporting to make marketing much more personal and effective for modern consumers. If you’re an ARI customer, you can log into your Website Performance Report to view your site analytics and consumer data. Click here to learn how.
For recreation and equipment dealers, data driven marketing is the key to increasing sales, improving return on your marketing investment and delivering the messaging and communications your customers want.
In short, data is the key to making your marketing more effective and efficient.
Leveraging Customer Data for Personalization
While it might seem counterintuitive in a world that prioritizes privacy, most consumers want you to learn more about them. In fact, Twilio Segments’ State of Personalization Report found that 52% of consumers report feeling more satisfied as their digital experiences with brands become more personalized. One of the best reasons to implement a data-driven marketing strategy at your dealership is to make your marketing more personal.
With data, you can know the brands and models that customers are buying, which platforms they’re coming from and how much they’re spending. You can apply this knowledge to your marketing to give each individual customer their own unique buying experience.
All of this results in a better shopping and buying experience for your customers and improved customer loyalty for your dealership.
Targeted Advertising & Campaign Optimization
Your data can help you hone in on specific audiences and shopper attributes, so you don’t have to cast such a wide net or rely on gut instinct to guide your marketing. Especially for dealerships with a limited marketing budget, data is key to knowing where to put your marketing dollars to get the best return on investment.
For example, let’s say that you were under the impression that most of your in-store visitors are travelling from up north to visit your dealership. But when you dig into your customer base, you find that the bulk of your customer base is traveling from the west, not the north. This may be because the north has another large competitor, the highway routes naturally direct traffic another way, or your location is simply inconvenient to a certain group of customers.
Whatever the reason, your data can help you target customers by geographic area, demographic or even by their different behaviors.
In addition to knowing the right audiences to target, data can inform your actual campaigns. With a better understanding of your audience—who they are, where they come from and what they want—you can focus on the types of messages that will resonate with your target customers. You can better predict their interests and behaviors and deliver the messages that are most effective for them.
Whatever your goals, as you focus on delivering the right message to the right audience, your data can deliver a higher ROI for your marketing spend.
Enhancing Inventory Management
In addition to helping you target audiences and personalize your marketing, implementing a data-driven decision-making strategy can help you analyze sales data so you can predict demand and optimize your inventory.
If you know how many customers are interested in a particular brand or unit, for example, you can plan and stock your inventory accordingly. Your data can help you know what shoppers gravitate toward and what they think about your inventory and services.
In addition to giving your customers more of what they want, which can boost overall sales and customer satisfaction, making inventory decisions based on data can reduce your inventory costs and improve your turnover rate, saving you even more money and improving the efficiency of your operation.
Improving Customer Relationship Management
The customer is at the heart of data-driven marketing. Every piece of data you gather will help you better understand your customers and give them the experience they want. So, it stands to reason that your data can help you foster better communication and relationships with your customers.
As you collect customer data, both before and after a sale, you can implement a data-driven customer retention strategy to keep customers coming back. Your data can help you to maintain your current customer base—informing you about their interests, preferred buying cycles, and current equity positions.
This data can also help you deliver timely, relevant marketing messages that are personal to each customer. It can also give you information about the lifetime value of keeping each customer—a KPI that you can benchmark against your competition and industry standards. In other words, your data can give you valuable feedback to help you continually improve your marketing and keep customers long-term.
Overcoming Challenges & Privacy Concerns
One of the biggest challenges of implementing a data-driven marketing strategy is collecting the data itself. That’s because consumer privacy laws are changing to better protect your customers’ personal information. Companies in every industry are having to move away from using third-party cookies and purchasing customer data.
In this new world of digital privacy, your dealership will need to ensure strict data privacy and comply with regulations. To do that, you will need to look inward for data.
By relying on your own customer base to gather data responsibly, you can build trust with your customers and still give them the personalized shopping and buying experience they want. You can use this first-party data to inform your email marketing, online ads and even to create new audiences.
Best of all, this is data that you have at your fingertips every day. You just have to know how to gather and use it to your advantage and your customers’ convenience.
Embracing Technology & Artificial Intelligence
Gathering data and implementing a data-driven marketing strategy is a big undertaking for any business in any industry. Luckily, advancements in technology and artificial intelligence can make the work much more manageable. Best of all, these technologies are more accessible than ever before.
Using complex algorithms, artificial intelligence can identify patterns to help you make sense of your data and inform your marketing decisions. Instead of going through each piece of data all by yourself, today’s technologies can make reliable predictions about your customers’ interests and behaviors to help you make informed decisions and grow your business.
As you implement your own data-driven marketing strategy, relying on technology and artificial intelligence—or getting help from a company that can do it all for you—will be critical to your success.
The Ongoing Process of Data-Driven Marketing
In an era defined by data abundance and intense competition for customers, dealerships that harness the power of data-driven decision-making have a significant competitive advantage.
But, as with most good business practices, data-driven decision making is an ongoing process. You have to continuously monitor key performance indicators, track the impact of your decisions and refine your strategies based on new insights.
As you implement these practices to become a data-driven dealership, make sure that you regularly review and update your data collection and analysis processes to ensure they align with your evolving business needs. By taking advantage of today’s technologies, you can use data to inform your marketing strategies, unlock new opportunities, streamline operations and deliver exceptional customer experiences that sustain business growth.