By Grant Dunning
Last
year, the media and the industry focused on the impact that
dealer consolidation has had on the retail side of the car
business. There is no question that Republic, CarMax, and
others like them have caused quite a stir and no one is
quite sure what the final outcome will be. But dealer consolidation
is only one issue among many that impacts the car business
today and is shaping the future.
Technology and the impact on the auto industry is another
significant issue. In addition to the emergence of new media
such as the internet, recent evidence suggests that numerous
successful dealerships are using technology assisted database
marketing to grow their business. The advancements in technology
have made it possible for any business to implement an effective
database and relationship marketing system. The speed of
change in technology that we are currently experiencing
is being categorized as a technology revolution.
In addition to the rapid changes in technology we have
all witnessed the changes in consumer behavior. Customers
are armed with information that enables them to be more
critical and demanding. In order to remain competitive you
need the right knowledge and tools to react quickly and
efficiently to changing customer needs. The winners are
going to be the companies that can incorporate technology
to help them market effectively to a targeted audience with
a personalized approach.
Many retailers are integrating database marketing with
relationship management. We can define “database marketing”
simply as the technology involved in creating a database,
or file, with information about your customers or prospects.
“Relationship management” is the process of
using the database information to communicate and market
to customers on a personal and customized approach.
Gathering the information can be a relatively straightforward
process. Over the years our business has evolved into a
relationship marketing company. Many of our clients use
our customer retention systems for gathering information,
or data, about their customers from which reports are created
to help them with marketing decisions. Clients can survey
100% of their customers for their level of satisfaction,
identify the media source that drew them to the dealership,
and secure referrals of other prospects. The clients can
also maintain regular contact with customers to encourage
service retention and repeat business loyalty.
Most dealers recognize the lifetime value of their most
important customers. These key customers are measured by
the retention rate in terms of service and re-purchase loyalty,
and by their spending rate in terms of how much they spend
in the service and parts department.
The challenge is to proactively identify your most valuable
customers and foster a healthy lasting relationship. It
makes sense to develop products and services that keep your
customers coming back to you instead of the Jiffy Lube down
the street or buying their next car form your competitor
across town. Developing a targeted marketing effort at these
VIP customers becomes a rather simple process once you know
who they are, how they buy, and what they like.
Database marketing has its application in mass marketing
as well. Knowing where your customers come from and what
brought them to you will help you determine how to spend
your ad dollars most effectively. And that should bring
you even more customers from your prime audience.
I encourage everyone to capitalize on the advancements
in technology with “database marketing” and
“relationship management”. Effectively applied
to your business, they will help you increase your knowledge
about your customers, make your marketing effort measurable,
improve your planning, increase profitability, give you
a competitive edge, and help you survive and succeed during
the technology revolution of the future.
Grant Dunning is President of the OCT Group, a marketing
company that has been helping dealerships in all 50 states
and Canada build relationships One Customer at a Time since
1986.
