I have been around the auto industry for nearly 30 years and I have seen a number of downturns in the market, but even the most discerning of analysts would say this has to be one of the most challenging ever.

Your dealerships are being pressed to make difficult decisions everyday on how you spend your marketing dollars. One approach would be to slash spending across your entire marketing plan. I have recently talked to a few dealers across the country that are employing this strategy. In follow up discussions, however, this strategy has realized little success. Nobody has ever achieved sustainable and substantial growth through these cost cutting measures.

These actions may even damage the most valuable relationships you have with your most important assets, your customers. You may also do irreparable harm to your brand. There is an adage in sports “the best defense is a good offense.” Dealers should take this message to heart. In these trying times, an aggressive marketing plan is necessary to capture the hearts and minds of your customers and ultimately a share of their wallet.

The foundation of your immediate and future growth and profitability are your current customers. Especially in today’s challenging environment, you need to maximize every existing and new customer relationship, as well as every opportunity to get to know and help your customers in order to keep them coming back to your dealership.

On average, 50 percent of customers never return to a dealership following the purchase of a vehicle! This represents a significant opportunity for dealerships to increase their loyal customer base and profitability by improving their relationships with their customers following this initial engagement.

Relationships are the foundation of loyalty.

The business definition of loyalty is retaining customers in a profitable way by understanding and meeting their needs. In order for loyalty to exist, your dealership must engage in a two-way dialogue with your customers. A relationship is created by delivering relevant, value-driven messaging to the right customer at the right time, providing an exceptional customer experience and recognizing and rewarding the customers’ business.

A relationship begins by knowing your customer. Knowing your customer means much more than just identifying a broad demographic or a zip code in which they live. For a dealership, this customer data is gained through each interaction, dialogue, and transaction. Dealerships that inform, learn from, and build upon each interaction from the beginning are well on their way to building a loyal relationship.

Merely capturing data from customer interactions doesn’t guarantee your communications will be relevant. Analytic insight or data-driven marketing is needed to provide the foundation for a dynamic roadmap for a sustained customer relationship.

A sophisticated, data-driven marketing program will offer one of the richest customer data sets a dealership will have. Dealerships who adopt a data-driven marketing strategy are able to gain valuable insight on their customers such as:

•    Who they are
•    Where they are in their ownership cycle
•    When the last time they visited your dealership was
•    How often they visit your dealership
•    When their warranty expires
•    How often they purchase a new vehicle
•    What their preferred method to receive communication is

From this information dealerships can determine the right message to send to a specific customer that is going to be perceived as relevant and valuable by that customer and increase their propensity to purchase. In addition, the more you know about your customers, the more you will be able to anticipate their needs and send them relevant messages and offers and as a result gain their loyalty and a larger share of their wallet.

Loyal customers means increased profitability.

The cost to market and communicate to and reward a loyal customer is a fraction of the cost of acquiring a new customer. A customer that buys a vehicle and regularly services their vehicle is 86 percent more likely to purchase another vehicle from you. NADA states the biggest expense and income opportunity in your dealership is the attrition of your customer base. This is one of the best places for dealers to focus their energies and resources.

Now is the time to get to know your customers better, use data-driven marketing to deliver relevant messages, provide exceptional service, keep them coming back, and watch your loyal customer base grow and your profitability increase exponentially.

Ed Barclay is a 31 year sales and marketing professional, who has held various executive positions at General Motors, Miller Brewing Company, Marketing Force, Carlson Marketing Worldwide and most recently as the Chief Client Officer at Visible Customer. For more information email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call 952-428-7505.

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