Having a clear view of all expiring leases in its market has helped Germain Toyota of Columbus, in Ohio, expand its business and cut marketing costs.
The dealership uses Propensity360, a tool from Pearl Technology Holdings and Experian that helps auto retailers target potential customers in their markets based on factors such as customers’ vehicle payments or the vehicles they drive.
“We [can] market to anyone in an expiring lease between a certain payment range,” said Germain Toyota General Manager Rich Newsome. That gives the dealership and Toyota exposure to customers who “hadn’t been considering Toyota, let alone Germain Toyota,” he said. “It’s gotten us in front of them before their servicing dealer or manufacturer had gotten in front of them.”
Typically, conquest campaigns are more expensive than equity mining because the dealership has to “get in front of customers a few times,” Newsome said. “But with the expiring lease campaign, customers are running out of time.” They often have only a few lease payments left, so they are more inclined to listen to their options, he said.
208 million
Late last year, Pearl expanded its relationship with Experian to offer dealerships information on consumers’ vehicle-buying habits. The information helps dealerships target consumers who have the highest propensity to buy or lease a vehicle within a certain time frame. For example, Germain Toyota markets to consumers with a propensity to buy or lease of 81 percent or higher, Newsome said.
Experian built the custom propensity platform for Pearl, and Pearl developed a platform that combines the propensity information with credit information. The tool helps dealerships market to the right consumers, but it also helps them to better manage their inventory acquisitions, Pearl CEO Bruce Thompson said.
“If I can surgically market a vehicle, what we are ascribing to do is lower the cost of acquisitions substantially,” he said. “We’re also looking at ‘what vehicles should I buy, and which ones should I not?’?”
The custom database has propensity and prescreen results for about 208 million anonymized consumers from Experian. A dealership can slice the data by term, monthly payment, interest rate and other factors, Thompson said. For example, if a 2016 Honda CR-V has 300 prospects in the market vs. 30 prospects for a 2016 Honda Civic, the dealership would rather buy a CR-V because there are more prospects for it.
Or, he said, if a store that sells a domestic brand wants to conquest Asian-brand leases, the dealership could see every consumer with an expiring lease within a specific payment range that has a high propensity to buy an Asian-brand vehicle.
At Germain Toyota of Columbus, Propensity360 “allows us to take aged units — or if you have a lot of one model in stock — [and] micro-target customers whose propensity should put them as a high potential client for that vehicle,” Newsome said.
For example, Germain Toyota has marketed to customers who would have a high likelihood of buying used vehicles when the dealership was trying to clear the lot of 2017 Corollas and RAV4s to make room for the 2018 models.
‘New data set’
The dealership sold 18 vehicles in November that it can attribute to Propensity360. The tool narrowed the dealership’s advertising spend and improved its outbound call efforts, Newsome said.
“Someone who is a hand-raiser on that product has much more propensity to listen to our call than just cold calling someone,” he said. “We could sell the same amount of cars with less marketing dollars, but I’ll be able to sell more cars with the same marketing dollars currently.”
In 2001, when Thompson launched American Auto Exchange for used-vehicle inventory management, “there were no inventory tools,” Thompson said. “We looked at days supply, profit per day. But today you’ve got a whole new data set. Technology has advanced in the last 15 to 16 years exponentially. We’ve got the ability to bring that to a dealer and put it to use in a practical fashion.”
