As interest rates rise and lease vehicles flood auctions, our industry is feeling the pinch of a downturn in the market. Many dealers instinctively look for ways to cut back when the market slows — with marketing dollars often in the crosshairs.
As a technology expert who’s been partnering with dealers for years, I challenge you to fight that impulse and instead change the way you think about, and approach, marketing. Millions of customers are still out there, but you won’t reel them in with costly, one-size-fits-all campaigns that don’t reach people actively shopping for a vehicle.
Now is the time to double down on strategic marketing by shifting your ad dollars toward solutions that use artificial intelligence and machine learning to identify active shoppers, uncover what they’re shopping for, and reveal how best to reach them. Let’s discuss how AI and ML work and how they help dealers make more appointments and sell more vehicles.
What are AI and ML?
I like to think of artificial intelligence as an umbrella, under which is the broad concept of machines being able to carry out tasks in a way that we would consider “smart.” To be considered AI, a machine or computer should mimic human thought processes and behavior and should act in a humanlike way. An example is Netflix, which uses AI technology to suggest movies you might like based on your previous choices.
Machine learning is a branch or application of AI that gives machines access to data so they can learn for themselves as they process more and more inputs. ML is a way of “training” an algorithm so that it can automatically learn and improve from experience without being explicitly programmed, and without human intervention. Amazon is a great example. Its proprietary algorithm uses browsing and purchasing data to “learn” about customers and then provide tailored product recommendations and promotions.
AI and ML can transform how you approach your market, and it’s not limited to the customers in your database. That’s right: This technology can identify everyone shopping for a vehicle in your market. This is true people-based marketing that allows you to track a customer across devices and deliver a cohesive customer experience.
As a result, you enhance your retention marketing, as well as unlock potential to gain market share when your competitors scale back and stop talking to the active shoppers in your market. AI and ML are the new currency and expectation of customers and the only way to compete, whether you’re a single-point store or a multipoint dealer group.
Target and Proactively Engage
The directors of the Texas-based, 18-store Keating Auto Group invested in an ML-based solution that delivers a daily list of active shoppers, including previous customers who were shopping again. This allowed them to pair online behavior with an actual shopper; salespeople used this information to proactively engage shoppers and lead them along a tailored sales journey. The investment paid off: Collectively, the group sells more than 25,000 vehicles and generates more than $1 billion in revenue every year.
Bill Luke Chrysler Jeep Dodge Ram didn’t back down when the Phoenix market started to slow. This store doubled-down strategically by investing in AI and ML, shifting 85% of its ad dollars to targeted digital marketing. They stopped wasting ad dollars and were able to drive monthly volume from 700 units to 1,000.
As these real-world examples prove, doubling down on AI and MI technology to target active shoppers and get more bang for your advertising buck is the best way to fight back in a down market. The active shoppers are out there. Investing in this technology shows you where they are, what they’re shopping for, and how best to target them. Now go out and get your share!
Natalie Born is the senior vice president of business development at Client Command and has expertise in acquisition, integration, and international product development.