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Fast Forward: Predictive Analytics

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In theory, direct marketing has always been future based. After all, it typically happens before any dealing in the showroom takes place. But today, intelligent direct marketing based on predictive analytics amounts to so much more than the “good old days” of sending out a bunch of mail and waiting for the up bus to pull in.

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At this point, we’re looking at a perfect storm of technological and cultural factors driving marketers to work harder to figure out what car buyers are going to do next. The question is whether predictive analytics is reality or hype.


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I remember a few years ago being at a NADA meeting and some of the factory bigwigs talking about using “big data” to follow the customer to where they are. Needless to say, there was plenty of skepticism in the room. It seemed like a fancy new name for what we were already doing, or rather what I thought we were doing. Sure, we worked our database, service records, got DMV records where we could and, in the process, sold some cars, congratulated ourselves and thought we were geniuses.We were so short sighted. It turned out that big data is real.

There’s no doubt that the landscape of our business has changed and become more complex. The advent of the Internet, in my opinion, has created the biggest single shift in the history of auto retailing, so it’s time to leverage the information that it generates — and use it intelligently — or miss the boat.

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Predictive analytics is the core of knowing which customers are going to abandon you and who may come back. The good news in this is that there is more and more data available beyond the holy grail of direct marketing, old-school demographics.

The use of anonymized Web browsing, data of people who will give up contact lists and privacy for a free app, and the records of recent major purchases (such as homes or furniture) all give the kind of data that allows us to create a perfect predictive model to see who will be moving toward an auto purchase in the near future. The key is marketing to these people at the right time. That’s where the old-school historical data comes into play. With it, you can time it with nearly pin-point accuracy to when a buyer will enter the market based on their past habits. It’s an almost Back to the Future look at marketing.

At this point, the key to drive quality traffic, ready to act, to the showroom is getting a strongly targeted relevant piece of mail with a well-worded message with a call to action to drive them to you. After that, it’s back to “Car Business 101,” and we can get back to congratulating ourselves.

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