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March 09, 2020 11:39 AM

Muldowney: Customer-centric marketing approach can boost success

Rick Muldowney
Chief analytics officer, digm
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    Rick Muldowney

    Automotive services providers have a big opportunity in 2020: to move away from the limits of their typical marketing and drive their customer relationships by anticipating and offering the next best product or service that matches their customers' needs.

    The time to shift from a product-focused approach to customer-centric marketing is now.

    General retail, financial services, and other industries are committing to this approach, raising customers' expectations for all their consumer relationships. And a crucial tool for implementing this customer-centric approach is Next Best Action.

    Next Best Action marketing basically flips traditional marketing, putting the customers at the center and tailoring offers and actions to fit their individual needs at the moment.

    For many in automotive services, this is a new way of approaching customer interaction, but it can offer a more realistic route to a better customer experience and improved return on investment (ROI) for those without a major data infrastructure powering their customer relationships.

    It can be done strategically with specific segments to complement and often exceed sales goals by deepening existing customer relationships.

    Changing status quo

    An auto services provider might sell a set of tires and, in a set amount of time, follow up with an offer for brakes, oil and new tires. Although demand for these services will vary greatly by need, the focus remains on pushing the products and services by set guidelines. It centers on prior purchasing of the product and few other factors.

    But this product-centric approach isn't looking at customers and customers' vehicles in a holistic way. Instead of executing multiple communications to a customer, basically as one-offs, why not bring all their needs-related information together and deliver the next best products for a customer based on their history, prior services and engagement with the provider?

    The customer data tells the story of what they need and want and lets the provider target those needs, rather than blindly push a product and annoy uninterested customers who have come to expect a higher level of recognition and appreciation as consumers.

    Leveraging all the available data lets providers become more relevant to their customers. Because you know the customer and vehicle history, a scheduled oil change also becomes a prospect for brakes.

    That's not because you're pushing brakes, but because the customer needs them. This needs-and-opportunity ratio keeps climbing as you get to know your customers better and act on that knowledge.

    The key concept is to use data science to generate probabilities on customer needs and wants for various product and service offerings. Understanding these likelihoods for each customer lets the provider adjust its marketing to send the right communication to the customer based on his or her vehicle's current needs.

    Not only will they appreciate a reminder to get their inspection sticker, but they likely also will be interested in an upcoming services sale. Done right, the marketing evolves into messages that are valued.

    It's a matter of getting the full picture that the customer's data reveals. Gathered from transactions, demographics, geo-graphics, vehicle and vehicle service information, manufacturer recommendations and other sources, the data starts coming together. With analytics, the picture starts to become clear.

    Science behind method

    Through modeling, the provider can identify products and services that guests are most likely to need and purchase — then deliver the most appropriate service suggestions and offers at the best time. They can use an engine built to optimize business rules and logic, timing, frequency, and model scores. And it keeps getting smarter.

    Internal IT teams, usually saddled with other responsibilities, can partner with outside resources to deliver these abilities to their organization with a nimble, flexible approach that can harness all that data.

    The result? An auto services provider that shifts from a products-looking-for-customers approach to presenting the right products and services according to customers' needs, when they are needed.

    With the ability to anticipate and offer the next best product or service that matches customers' needs, auto services providers can increase the value of that relationship exponentially.

    We've regularly seen direct marketing response rates climb 9% to 11%, delivering more vehicles per store, per day.

    As complicated as it may sound, making the switch to customer-centric from product-centric is very doable. To get started, it's often a good idea to take a variety of offers and model on an individual product basis.

    It's the beginning of building a single customer view with the goal of assigning a series of probabilities tied to a customer's vehicle to the products and services you sell.

    Organizational support grows as you start to see results from the game-changing ability to offer the next best product or service to meet customers' needs, even before they've asked. Providers can then look at their whole suite of products and services, scoring customers and assigning them probabilities for each service, boosting results across the board.

    The cost of not getting started, as many businesses already have discovered, can be much higher. Customer ROI stagnates. Data-driven competitors swoop in to pick off disillusioned customers. Multiple selling opportunities are lost.

    Businesses across industries are now committing to customer-centricity; they've realized that their survival is highly dependent on it.

    For automotive services providers, 2020 can be a year of opportunity to embrace this approach and shift into a higher customer gear, instead of trying to catch up in the years to come. The rules have changed — becoming customer-centric is the next smartest step they can take.

    Rick Muldowney is chief analytics officer for digm, a customerization marketing agency that combines complex data analysis and marketing technology to create a holistic customer view to help drive businesses forward.

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