Devin Daly, CEO of SpinCar and special guest speaker at the 2019 AADA National Dealer Convention, has urged Australian Dealers to follow the lead of Netflix and Amazon by striving to make consumers’ online experiences as personalised as possible.
In a special presentation on e-commerce, Mr Daly said Netflix was the standard-setter in personalisation, and had many lessons Dealers could put into practice on their own websites.
“Netflix doesn’t just capture what videos you watch. They’re looking at literally everything you do inside their platform, so they’re looking at ‘what searches did you make?’, they’re looking at ‘what previews did you watch that ended up causing you to convert and actually watch the full show?’. They’re looking at – say you’re on a five-episode binge – ‘which episode did you decide to stop that binge at, and what were the characteristics of that show?’ – they micro-tag every little scene. They look at what scenes did you look at, and either stop, skip through, continue watching, engaging, etcetera,” he said.
Similarly, Amazon quickly rose to the top of the highly-competitive online retail space by taking their first-party data very seriously and tailoring personalisation based on that.
“If you look at this (Amazon) experience, literally everything is customised. This is a completely different experience than any other human being would see. It shows: ‘do you want to order things again?’; it’s got recommended pairings; it’s got a completely curated list, and that has enormous business value for Amazon,” Mr Daly said.
Addressing the concern that consumers spend far less time on Dealer websites than Netflix or Amazon, Mr Daly gave the example of eyeglass retailer Warby Parker, which took consumers through a ‘light, fun, survey’, asking them questions such as if they were male or female, their face width, the shape of glasses they were interested in, what colours and materials they liked, and using that information to present consumers with a completely customised set of recommendations.
“I think what this proves is if the implication or the explicit promise to a consumer is they will have a more curated, personalised experience, they’re willing to give you this info,” Mr Daly said.
If you don’t ask, they won’t tell
“I think in the auto space we’re all scared to ask consumers, because we’re all about driving to the lead, and the more we ask them the more likely they are to not complete that lead form. But in reality, this has enormous value if you can start to understand the consumer behaviour here. Consumers are conditioned to this.”
Netflix sees a billion dollars in annual churn reduction because of their personalisation engine. They also credit it for 75 percent of the shows watched on their platform.
“You look at Amazon, they credit their personalisation and recommendation pairing engine with 35 percent of their revenue. And when you actually just look at their e-commerce revenue, and discount the web hosting and other businesses that Amazon’s in, it’s even higher, it’s close to 60 percent from their personalisation engine,” Mr Daly said.
Third-party personalisation company Certona sees on average a 110 percent lift in conversion rates and 37 percent increase in basket size thanks to personalisation.
“Because they’re a third party, it proves that if you don’t have data science and personalisation know-how in-house, you can rely on a vendor and still see significant business results and enterprise value,” Mr Daly said.
Be like Netflix
Netflix uses the data it collects not just to personalise experiences, but to help it understand what works, and thus develop its programming. Mr Daly said Dealers can do similar.
“A lot of the stocking products out there, the wholesale products like vAuto, they only use very general macro-level demand data; they’re primarily producing a price for wholesale based on supply data – supplying the market,” he said.
“What we see some Dealers doing is looking at their own first-party data and they know that a particular future is highly in demand, and they’re willing to step up beyond what vAuto recommend purchasing that vehicle for, an extra $300, because they know, that future’s highly in demand and they can likely fetch an additional 500 in gross profit from it and it’ll turn the vehicle 44 percent faster. That’s that sort of snowball effect virtuous cycle that can be had with investing in first-party data.”
A study conducted by dealer.com examined Dealers – mostly large groups – that were beginning to employ personalisation, and found they were seeing 200 to 340 percent lifts in major website KPIs.
“We’re not here to say that the sky is falling and the auto business is doomed, but we do think, in an age of disruption, there will be ongoing consolidation and acceleration in consolidation; in our opinion what will separate the wheat from the chaff are those that are investing in their first-party data,” Mr Daly said.
“This sounds like a daunting task: from what you’re doing now to providing personalisation like Netflix sounds pretty daunting. Thankfully it’s really not, and there’s a lot of off-the-shelf tools that you can use.”
Google Analytics (GA) is a free tool that is very easy to use, that the vast majority of Dealers are probably already using.
“If you’re not, candidly in my opinion you’re already probably five years behind,” Mr Daly said, advising Dealers to continue education for their marketing staff by getting them GA certified.
“GA’s not going to give you the one-to-one consumer data that we’re talking about here. But what it will do is it will give you good macro, trend data: it’ll show you, for example, demographics of who’s coming to your site, where are they coming from, what devices are they coming in on. It will also show you by traffic source: how are they getting there – is a certain medium that you’re investing in driving auto traffic or not?”
GA will also show the quality of that traffic, in terms of section duration, bounce rates and other metrics. All in real time. But it needs constant maintenance and updating.
How can you leverage this data to drive business value and results?
Through more consultative, more comprehensive, customised, lead follow-up.
“If you think about that data that we give our sales people when a lead is submitted, it’s extremely limited – first name, last name, email address, phone number. If you’re getting also the vehicle that that person’s going to lead on, you’re doing better than most Dealers,” Mr Daly said.
“What ends up happening is the BDC or sales department ends up delivering the same exact conversation whether again, it’s a 70-year-old retiree, or a 15-year-old new driver. It turns into this, ‘Hey, can you come on down for a test-drive?’; not really building any value, not really differentiating your dealership at all, not being consultative whatsoever, and that’s why in our opinion – at least in the U.S. market – there’s really abysmal lead-to-show rates.”
Mr Daly advised Dealers to capture “more granular data”, by examining not just what pages or vehicles somebody looked at, but also the hotspots they interacted with, and the features engaged with.
“Which components of the vehicle are they really drilling into? Are they really looking at that wheel? You’ve got to get really granular with what you’re tracking. Just like Netflix doesn’t just look at what shows you watch, they look at scenes, they look at previews, they look at what you’ve stopped, they look at your searches – look at what photos people are interacting with by meta-tagging their photos. You can tell for example if somebody’s revisited the engine photo 12 times, that person’s likely a performance buyer – that has value when your BDC or sales department goes to follow up with that person,” he said.
“Using interactive tools is critical. Today’s consumer can get any information they want in a couple of clicks and a couple of seconds. Forcing them to click through 40 thumbnails is not the experience that today’s consumer has come to expect. Providing these interactive tools not only leads to the additional engagement – which will drive up net conversion rates, lead submission enquiry rate, etcetera, but you’ll also then give them the ability to basically tell you what they’re interested in. By allowing them to get to what they’re interested in quickly, they’re telling you what the important features or facets of that vehicle are.”
Knowledge is power
It is important not just to track consumer activity on your site but to get as comprehensive a profile of that person as you can, from the specific marketing or advertising campaign that brought them to the site to the exact feature they are most interested in.
Dealers should ask ‘are you a performance buyer’, ‘are you a safety buyer?’, ‘is there a make-or-break feature?’. They should find out if a consumer wants the heads-up display, or the turbo-charger, for example.
“This is the super-rich, first-hand, opt-in data that we suggest even weighing more heavily in your efforts than even that click-stream data, or tracking consumer behaviour,” Mr Daly said.
“If a person visits the site six times and has engaged for almost 30 minutes, this is a person you should follow up on immediately.”
This information can be used for upsells, using the consumers interests to tailor discussion and make customised recommendations. Location data is also highly valuable.
“By using this additional layer of personalisation, this additional data and ad-tailoring in AB tests, we see results about nine-x higher clickthrough rates and 40 percent higher post-click conversion, due to the increased relevancy,” Mr Daly said.