New tools and techniques like omnichannel marketing, leveraging AI, data and CRM are gamechangers. Can dealers adapt?
Technology is quickly changing the automotive industry. The way cars are marketed, sold, tracked and analyzed today is very different than they were just a few years ago. It is an exciting time to be in this ecosystem — that’s for sure.
Below are a few examples of how retail automotive has evolved, and the related strengths, weaknesses, opportunities and threats that they bring to the table. Dealers must determine how each will create additional revenue streams or cost savings. They should also consider brand, geographical region, target market, staffing capabilities and willingness to invest in new technologies when analyzing these areas.
The marketing strategy of a dealer group is their single most important success factor today. The benefit of having a well thought out, and professionally structured, “marketing wheel” includes better customer experience, increased loyalty, customer retention with lifetime value and world-class brand recognition.
By definition, the “Omnichannel approach” represents an organization’s presence across various marketing channels including: Websites, Apps, SMS, social media, email and traditional marketing campaigns like in store events, mail outs and flyers, AutoTrader, etc.
This approach is no longer optional — it is a critical success factor. The real discussion for retailers today is understanding how it fits into its current processes. That is, which of the elements should be maximized and minimized while considering cost, outreach, ROI, impact on brand and customer experience. Retailers can’t have everything. They have to figure out what the best balance is for their brand and customer base.
Artificial Intelligence (AI)
Artificial Intelligence (AI) is perhaps the most heard “buzzword” today. Dealers can leverage this technology to create a real competitive advantage against their peers. Imaging bolting on machine learning and technology to automate the omni channel marketing experience — talk about an opportunity!
Today, the initial customer interaction is managed through your BDC or your group’s marketing team. Customers often feel that the information they receive is fragmented and this significantly hinders the customer experience.
Separate humans are interacting with customers on a daily basis and the weakness in most groups is that different messages are being delivered to the world. Inconsistency in your marketing message is a significant threat to the automotive experience.
AI can solve this. Machine learning can decide how to interact with the world based on customer specific preferences and actual dealer specific information like current inventory, wait times, service availability. That means, AI can turn this weakness into a tangible opportunity very quickly!
Imagine if your AI based BDC and marketing teams work proactively to scrape data off lease portfolios and automatically contact customers who are coming due, offering them selections of vehicles coming down their pipeline and trade value and equity position using up-to-date market data — this is all possible with the right AI tool.
The benefit of having a well thought out, and professionally structured, “marketing wheel” includes better customer experience, increased loyalty, customer retention with lifetime value and worldclass brand recognition.
This technology can respond to customer queries in an interactive and fun way (i.e. the “Chat GPT” tool that actually speaks). Customers ask questions and AI provides real time answers using data pools built by dealers (i.e. extracted from DMS systems, CRM tools, accounting data, search history, geographical specific data). This could revolutionize the way we do business and have a monumental impact on profit lines and customer experience for years to come.
The key to bringing the above noted theories to life is having a warehouse of clean, up to date, usable, flexible and leverageable data. It should be extracted from your CRM, DMS, and various other sources for customer and market information. It must live in a functional warehouse (i.e. SQL server) that can be sliced and diced and have a user interface that is easy to use.
The inherent cost of this aspect is the most prohibitive, with cost >$100K on the low end. The problem is that most dealers (especially the smaller ones) are not actually willing to invest into this concept. They “talk the talk” but don’t “walk the walk.” It is very much an unknown territory for most dealers and the ROI has yet to be proven.
Overall, we may be closer to this reality than we think. The technology already exists today. The real threat is that car buyers claim to be forward thinking tech people but, as we saw during the pandemic, are not willing to alter their buying approach for big ticket items like cars.
For this to actually become reality, new generations of buyers must replace the old ones and OEMs must fully buy into this new way of doing business.
Time will tell what the future of retail automotive will look like. The only guarantee is that it will be different than it is today.