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Playing the Long Game: Revitalize Your Digital Marketing by Spending on the Right Customers
1. My name is Kristen Judd2. I'm the CEO and Co-founder of 3 Birds Marketing.3. I'm addicted to data.
A DIFFERENT WAY TO LOOK AT YOUR DATA
A new way to think about and communicate with your
customers and prospects
A better way to spend your marketing dollars
Your customers are not a vehicle.
Your customers are not a repair order.
Your customers are not an accessory.
Your customers are not an accessory.
Your customers are not an extended warranty.
Your customers are not an extended warranty.
Not all customers are the same.
Your customers are people with different interests,
attributes, likes and dislikes.
Too many dealers look at their customersas their most recent transaction or treat
themlike they’re all the same.
Why?
Historically dealership data has
been structured transactionally…
…making it difficult to think in terms of customer lifetime
value.
Dealers have financial and non-financial data, but difficulty joining it all together
to make decisions
Dealers know surprisingly littleabout their customers
Emphasis on short term revenue goals
This Month
Emphasis on short term revenue goals
This Week
Emphasis on short term revenue goals
This Weekend
zz
z
Emphasis on short term revenue goals
TODAY !!!!
zz
Makes it hard to get off the hamster wheel.
Are you left to trust your gut about whether you're investing in the right
things ?How do you know if you're tripping over
dollars to get to dimes?
Understand how much customers contribute to my bottom line
Playing the Long Game with Digital Marketing
3 Primary Learnings
1
Identify unique behavior patterns of high value customers
Playing the Long Game with Digital Marketing
3 Primary Learnings
2
Create, acquire and retain more high value customers with engaging communications and digital marketing
Playing the Long Game with Digital Marketing
3 Primary Learnings
3
20%of your customers
2/3of your dealership revenue
The top
20%of customers
Have an annual spend of
$2,090
66%of your dealership revenue
Have an annual spend of only
$258The other
80%of customers
Taking it even further
Study Overview:
Representative set of import and domestic dealerships
All customers included had at least one vehicle purchase
Merged various data sources to create full profile of each customer
Evaluated purchase and digital activity over 5-year period
Study Overview
MARKETINGCAMPAIGNS
DMSCRM
SOCIAL
3RD PARTYDATA
Understanding LTV
Lifetime Value (Typical Dealer Customer)
Average Gross$3,023
Typical Customer
3.1 years2.8 service visits1.2 vehicle purchases
Sales73%
Service27%
LTV (Low Value and High Value Customers)
Low Value Customers
3.1 years1.1 service visits1 vehicle purchase
High Value Customers
3.1 years5.1 service visits1.6 vehicle purchase
Average Gross
$1,586Average Gross
$5,599
VS
Lifetime Value is normally distributed
Lifetime Value Relative to Mean-2000 -1750 -1500 -1250 -1000 -750 -500 -250 0 250 500 750 1000 1250 1500 1750 2000-2000 -1750 -1500 -1250 -1000 -750 -500 -250 0 250 500 750 1000 1250 1500 1750 2000-2000 -1750 -1500 -1250 -1000 -750 -500 -250 0 250 500 750 1000 1250 1500 1750 2000
Above Average vs. Below Average Customers
Average ValueBelow Average Above Average
Above Average vs. Below Average Customers
Above Average Customers
Average ValueBelow Average Above Average
Highest Value vs. Lowest Value Customers
Average ValueBelow Average Above Average
Lowest ValueCustomers
Highest ValueCustomers
Sales and Service TraitsCustomers have propensities based on sales, service
characteristics
Average Value
Sales and Service TraitsCustomers have propensities based on sales, service
characteristics
Average Value
Lease (89%)
Finance (114%)
Sales and Service TraitsCustomers have propensities based on sales, service
characteristics
Average Value
New Vehicle (84%)
Used Vehicle (115%)Lease (89%)
Finance (114%)
Sales and Service TraitsCustomers have propensities based on sales, service
characteristics
Average Value
New Vehicle (84%)
Used Vehicle (115%)
0-15 Miles (105%)
21-50 Miles (86%) Lease (89%)
Finance (114%)
Sales and Service TraitsCustomers have propensities based on sales, service
characteristics
Average Value
No Svc Visits (83%)
6 Svc Visits over lifetime (122%)
New Vehicle (84%)
Used Vehicle (115%)
0-15 Miles (105%)
21-50 Miles (86%) Lease (89%)
Finance (114%)
Highest Value vs. Lowest Value Customers
Average ValueBelow Average Above Average
Lowest ValueCustomers
Highest ValueCustomers
Buy vehicles with cash
No service visits
Make up only 10% of total
revenue generated
More than 5 service visits per
year
34% higher email
penetration and engagement
Live within 0-5 miles of the
store
How Behavior Patterns Translate into Activity
Below Avg Above Avg.
2.13
3.81 +79%
Above Average CustomersHave 79% More Service Visits
Highest Value CustomersHave 803% More Service Visits
803%Increase
0.91
8.22
Highest ValueLowest Value
Above Average CustomersHave 26% More Vehicle Purchases
Below Avg Above Avg.
1.07 1.35 +26%
116%Increase
1.01
2.18
Highest ValueLowest Value
Highest Value CustomersHave 116% More Vehicle Purchases
Below Avg Above Avg.
17.1%
18.4%
Above Average CustomersEngage With Your Email Communications
More+8%
27%Increase8%
35%
Highest ValueLowest Value
Highest Value CustomersEngage With Your Email Communications
WAY More
How to Invest Marketing Dollars
to Create, Engage and Retain High Value
Customers
Ensure segments have meaningful differences in value potential
$ $$ $$$ $$$$
Step 1 Differentiate on Value
Focus on how customers act after you segment them not before!
Zip CodeVehicle TypeModel Year
IncomeGender
STATIC
Time Since Last VisitFrequency of VisitsAvg. Transaction AmountAppointments
HISTORICAL
Likely to Get an Oil ChangeLikely to Engage via EmailLikely to Buy a VehicleLikely to Visit WebsiteLikes and dislikes
PREDICTIVE/ DEMONSTRATED
INTEREST
Step 2 Look Forward
Step 3 Incorporate Digital Perspective
What Segmentation Could Look Like
Data is from representation sample of over 100K customers
Segmentation DriversLikely to purchase
Likely to engage
Sample Approach
Elite
PotentialAverageAt Risk
Disaffected
Highest Value Customers
Lowest Value Customers
Data is from representation sample of over 100K customers
92xservice purchase rate
Post Segmentation Results
Disaffected
At Risk
Average
Potential
Elite
1%
8%
14%
27%
56%
6-Month Service Rate
Predictive Power
Data is from representation sample of over 100K customers
Disaffected
At Risk
Average
Potential
Elite
0.1%
0.2%
11.2%
18.6%
23.9%
Digital Engagement Rate
290xengagement rate
Digitally Relevant
Post Segmentation Results
Data is from representation sample of over 100K customers
Post Segmentation Results
Disaffected
At Risk
Average
Potential
Elite
$45
$57
$219
$326
$771
6-Month Revenue
Value DrivenData is from representation sample of over 100K customers
16xHigher revenue
Post Segmentation Results
Disaffected
At Risk
Average
Potential
Elite
2%
6%
28%
35%
29%
Expected Revenue Contribution
92% of Future Value Potential
INVEST MORE
Strategy Shift Your Dollars
Predicted Revenue in Next 6 Months
Taking Action
Tailor messaging to current automotive needs
and demonstrated interest to createbetter consumer experiences
Current Automotive Need Path
61
Higher value customers identified as likely having a current automotive need
New Incentives Follow-Up Trade Tool
62
Current automotive need
New Incentives Follow-Up Trade Tool
63
Higher value customers identified as likely having a current automotive need
New Incentives Follow-Up Trade Tool
64
Current automotive need
New Incentives Follow-Up Trade Tool
65
Higher value customers identified as likely having a current automotive need
New Incentives Follow-Up Trade Tool
66
Current automotive need
New Incentives Follow-Up Trade Tool
67
Move through the stages providing relevance and friction-free experiences
$40,851 $64,372
Tailor Messaging to Demonstrated Interests
Strategy Customize the Experience to Demonstrated Interests
Enrich their online experience
Understand a customer’s preferences and demonstrated interest
Needs a service loaner
Enjoys the latest tech
Worried about safety
Obsessed with saving
time
Repurchase prior to end of finance
term
Needs a service loaner
Enjoys the latest tech
Worried about safety
Obsessed with saving
time
Repurchase prior to end of finance
term
Strategy Customize the Experience to Demonstrated Interests
Enrich their online experience
Understand a customer’s preferences and demonstrated interest
Needs a service loaner
Enjoys the latest tech
Worried about safety
Obsessed with saving
time
Repurchase prior to end of finance
term
Strategy 3 Customize the Experience
Enrich their online experience
Understand a customer’s preferences and demonstrated interest
Needs a service loaner
Enjoys the latest tech
Worried about safety
Obsessed with saving
time
Repurchase prior to end of finance
term
Strategy Customize the Experience to Demonstrated Interests
Enrich their online experience
Understand a customer’s preferences and demonstrated interest
Needs a service loaner
Enjoys the latest tech
Worried about safety
Obsessed with saving
time
Repurchase prior to end of finance
term
Strategy Customize the Experience to Demonstrated Interests
Enrich their online experience
Understand a customer’s preferences and demonstrated interest
Needs a service loaner
Enjoys the latest tech
Worried about safety
Obsessed with saving
time
Repurchase prior to end of finance
term
Strategy 3 Customize the Experience
Enrich their online experience
Understand a customer’s preferences and demonstrated interest
Benefits Engage, Engage, Engage
Benefits of Non-Promotional Content
+63% Clicks+61% Service Visits
+28% Vehicle Purchases
Based on approximately 500K contacts from sample of campaigns from dealers
New ModelsStore EventsVehicle EducationLifestyle
Examples ofNon-Promotional Content
Segment your customers into value segments
Getting Started with a Simple Approach
1
Invest more in your high value and high potential segments
Getting Started with a Simple Approach
2
Use LTV segmentation and predictive modeling totailor highly relevant messaging
Getting Started with a Simple Approach
3
Leverage high return digital channels to track customer intent,
fuel predictive models and develop additional data
Getting Started with a Simple Approach
4
