With Model Shake-Ups Looming, It Pays to Know Your Customers
For the latest evidence that nothing lasts forever in the automotive retailing industry, look no further than the new round of vehicle models set to be discontinued in 2019.
Some of these aren’t truly going away so much as getting a redesign and a bit of rebranding. Others, like the Ford Fiesta or the Volkswagen Touareg, will truly be gone forever with no comparable replacement within that brand. In fact, 13 different models are set to disappear in 2019, according to Forbes.
This phenomenon comes at a time of even bigger industry disruption as major players like Ford announce they’re phasing out sedans altogether in the face of exploding crossover popularity.
So, what does this constant lineup transformation mean for dealers?
First, while manufacturers might be focusing on the decisions they think make sense for them, you still have to sell the available product.
Second, the fact that many buyers simply won’t be able to buy the same car they had, or even a comparable vehicle from the same manufacturer, means these customers are forced into shopping mode.
That represents an opportunity if you have the know-how to answer one key question:
What are they likely to buy next?
The Value of Knowing Your Customers
Answering that question means understanding your customers by leveraging the insight of smart analysis to know what they will want in the future.
What does smart analysis entail, exactly? One example would be predictive analytics, a fancy name for using algorithms to identify the likelihood of future outcomes based on historical data.
Put another way, it’s analysis that can empower you to market proactively thanks to reliable predictions of future customer behavior or needs.
How does that analysis work? Imagine looking at similar groups of people and the actions they took when presented with a specific situation. Then imagine a system that can analyze the outcomes that have happened many times in the past and return probabilities of the same outcome happening again in the future.
It’s important to note that the more specific data you input in such a system, the more fine-tuned and individualized results you can get back.
Let’s go back to the issue of vehicle lineup transformations. By leveraging granular customer data for a predictive analytics approach, you can make reliable inferences that help you guide the buyer to their next model.
How do you prevent a customer from defecting when you no longer sell the car they drive? You do it by knowing what their underlying needs and behavior patterns are based on the existing data, then presenting an option that makes sense for them and meets those needs.
When we break predictive analytics down to this level it might seem obvious, but understanding the following points and putting them into practice will set you apart:
- These insights are present in the existing data.
- It’s possible to leverage the data to make consistently reliable inferences of future behavior.
- It’s critical to follow up on actionable insights with tried-and-true targeted marketing customized down to the individual level.
This is the power of knowing your customers. It’s the only way dealers can consistently retain those who want to be loyal to a brand or model, but are challenged by retiring models and transforming lineups.