TO MITIGATE LINGERING EFFECTS OF THE PANDEMIC, auto dealers today are
leveraging new strategies and technology resources from Equifax and
partners like Team
Velocity to find, win and retain customers and acquire inventory.
“Dealers are looking to drive demand, while keeping gross
margins and turn rates high to increase market share,” said Angelica
Jeffreys, Vice President of Enterprise Alliance Partners for
Automotive at Equifax United States Information Solutions (USIS).
Traditionally, dealers have invested a large portion of their
marketing efforts on retaining customers by spending millions on lead
generation tools to help drive showroom traffic. This method of
targeting from their own customer relationship management (CRM) or
dealer management system (DMS) can often lead to overlooked
opportunities to expand beyond their brand or prospective in-market
customers to a new pool of consumers that might be interested in their offers.
Dealers’ current dilemma
As marketing budgets have decreased since the onset of the
pandemic, the investments they do make are vitally important to
maintain the dealer's presence and branding. Even so, they are
realizing significant per-vehicle profits on every sale. According to
the National Automobile Dealers Association (NADA), the U.S. retail
gross profit per new vehicle was averaging around $3,928 for 2021,
whereas used vehicles were averaging at a very close $3,651 per unit.
“To continue selling vehicles at these profit levels, sourcing
the right inventory is a central strategy for success.,” added
Jeffreys. “Leveraging advanced target marketing technology combined
with the right partners can ensure higher profits today.”
A new approach to targeting
While dealing with market pressures and challenges, dealers
must find ways to evolve their marketing strategies. Working with
Team Velocity has helped uncover new approaches to using anonymized
differentiated data assets and proprietary propensity scores to
identify and target "perfect-time" shoppers – individuals
who are credit-qualified and most likely to buy a vehicle now.
“Off-lease customers are a valuable target for dealers to
source inventory for their used car department and at the same time
sell newer models,” said Scott Fletcher, co-founder/partner of Team
Velocity. Recently, dealers have been testing a new campaign approach
to capitalize on off-lease audiences through coordinated
communication, blending mail and digital targeting served as early as
twelve months before lease-end. “Results from this type of campaign
suggest that 50% of consumers who lease vehicles, will re-lease with
the same brand/dealer leaving the other 50% off-lease customer pool as
the perfect target audience for conquesting efforts,” added Fletcher.
Through this approach, dealers have created new audience models
to identify high probability customers with the highest statistical
probability of upgrading to a new car. Dealers can further enhance
their “perfect-time” strategy by prioritizing consumers with a higher
likelihood for loyalty and greater overall lifetime value to their dealership.
Equally important to the right audience is the right messaging
as consumers look to brands for reliability during uncertain times
and reward those who meet their needs. To achieve this, dealers and
their partners are tapping into advanced expertise in expanded data
assets from Equifax and Team Velocity to improve personalization and
engagement in the right channels with their preferred audience. They
are also matching offline data to target consumers online through
prominent touchpoints like over-the-top (OTT), social and display,
allowing for a more holistic marketing approach and reinforcing
“With these new strategies in place, dealers will be well
positioned to thrive in today’s challenging environment, while being
well prepared for the return of more normal inventories in the
future,” said Jeffreys.