As the automotive industry becomes more adept at collecting internal customer information, it is turning to database marketers to convert this data into sophisticated, targeted marketing campaigns and to find prospects and customers.
Five years ago, Harte-Hanks Data Technologies' automotive customers simply wanted to find out who the owners of their cars were, but that scenario has changed considerably.
“Automotive manufacturers used to have data all over the place and have always relied [on dealers or warranty or service companies] to sell them back their data, just so they could find out who their customers were,” said Michael Burke, director of business development and automotive industry practice at Harte-Hanks, Billerica, MA. “Then, these manufacturers got better at gathering information internally and gathering prospect information from the Web and other interactive units and realized that there was an opportunity for more sophisticated modeling.”
Most manufacturers give database companies such as Harte-Hanks data from a variety of sources, including their Web sites, telemarketing centers and internal call centers. Or they buy external data from third-party compilers. A database company integrates the data, cleans it, matches it and lets manufacturers access it via software tools and analytics.
By using modeling techniques, Harte-Hanks can find out, for example, which customers leave the franchise and stop repurchasing service. Harte-Hanks can advise the automotive manufacturer's dealer to “tailor [its] message based on what [the] customer is actually experiencing right now,” Burke said. “They might not want to send them their new warm-and-fuzzy campaign right now.”
Harte-Hanks can use this data to create a slew of new database marketing products for its clients, including e-mail databases, databases of vehicle ownership and prospect databases of customers outside the franchise or existing customs whom the company wants for repeat business.
Depending on the relationship and sophistication of the automotive customer, Burke said his customers either ask Harte-Hanks to use modeling techniques to find any relationships or tell it to study something more specific, such as owner retention.
Automotive manufacturers are getting more customer information via their Web sites — which helps them become better database marketers.
They are at a point now where “they really want to engage their visitors and give them as much information as they can on their Web site,” Burke said. “They have created an environment where the customer can say, 'OK, I'll tell you about me, [as long as] you tell me how you can help me by giving me car pricing and vehicle availability information.' “
Harte-Hanks' automotive database marketing business division employs 30, not including support staff from other departments.
Bill Barrett, director of automotive market planning at automotive database marketer The Polk Co., Southfield, MI, agreed that manufacturers are getting savvier in their database marketing. He cited greater data availability because of stronger dealer communication systems that allow manufacturers to get more accurate information more quickly from their dealers.
“Most of these dealer communication systems are vastly improved and are direct dealer-to-factory hook-ups,” Barrett said. “Ford, GM and Chrysler — all of the major companies — have put money into their dealer communication systems over the past several years and have been able to get more accurate and timely customer and retail sale information.”
Vehicle manufacturers are asking database companies such as Polk to turn the raw data into market-area reports or campaign-generated programs focusing on such areas as parts and service or new car introductions. Polk usually uses these companies' internal data and matches it with external data from motor vehicle departments.
Polk's analytic consulting group builds predictive models that track owner loyalty down to the model level, a relatively new concept for car manufacturers. These campaigns are helping manufacturers find out which customers — organized by demographics, for example, are most loyal to a certain auto model.
“Database marketing is at the heart of all of these [loyalty] programs,” Barrett said. “Essentially, manufacturers are taking historical database data and leveraging it as a predictive tool.”
Historical data is more easily accessible, he said, because of another new trend in the automotive industry — better database marketing and mining tools.
“These tools allow them to understand the smaller segments of their customer base,” Barrett said.
Manufacturers and dealers also are getting better at working together, sharing information more readily and working on marketing campaigns.
“Manufacturers are convincing the dealer network that the six-inch stack of leads is not better than the two-inch stack of targeted leads,” Burke said. “And dealers are getting much more receptive to it.”
This relationship is positive from every angle, Barrett said: “[Database marketing] will help dealers with their local, direct marketing campaigns and help manufacturers — who traditionally use mass-media vehicles for advertising — to also increase their use of direct mail down the line.”
Harte-Hanks has several ideas for the future. The company is developing products that will let automotive manufacturers access and update customer data more quickly.
“Automotive customers will be able to tell manufacturers about performance problems they may be having,” Burke said, “and the manufacturer may be able to track that person differently in its the next round of communications from the person who said he loves his car, all on a real-time basis.”
Polk also will be introducing some new products by late summer that are designed to help dealers and manufacturers enhance their database marketing. The off-the-shelf-style dealer products and the manufacturer programs will combine database management products and advanced consultative services.