Dealers targeting high-value customers see more return with less ad spend

CARY, N.C. - 

After using over 700 different characteristics to target high-value customers via Semcasting's new patented IP targeting solution, dealers of Luther Automotive Group have seen impressive results over the course of six months.

“It’s one thing to attract your own customers to purchase another vehicle, it's a totally different thing to go into the marketplace and look for households and customers that have never interacted with your dealership in the past,” says Michael Murphey, general manager of automotive solutions at Semcasting, creator of the solution SmartTarget Conquest, which is designed to bring dealers buyers who will transact with them for years to come.

Using transactional data to create a custom predictive model built from dealers existing high lifetime value customer base, Semcasting’s SmartTarget Conquest identifies and scores households in their trade area who have the appropriate affluence and lifestyle to meet its own high lifetime value criteria.

Households who have previously done business with the participating dealers are excluded.

“So we’re serving display adds only to households that have never transacted with the dealership in the past,” Murphey said.

Luther Automotive reported that 45 percent of the customers targeted had at least one service at the dealership, profit per vehicle increased by 17 percent and cost per conversion was as low as $139.39.

When asked about the over 700 characteristics that Smart Target Conquest evaluates, Murphey said each dealership he’s ever built a model for has a unique model.

“If I take a Honda dealership in Minneapolis and compare their high lifetime model to a Honda dealership in Miami, their models are incredibly different. That’s why we take the time to onboard every dealership’s DMS data and look at the slight nuances of all of their different customer bases instead of putting together some vanilla model, and say this is the type of model that will work for your dealership,” he said.

Though most high-value customers might buy new, the model does not exclude customers who may be looking for used options.

“The model is built on the premise of those customers that not only purchase a vehicle but have multiple services with the dealership as well and does not discriminate against new- or used-car buyers,” Murphey explained.

“With the success of SmartTarget Conquest we've worked with Luther stores to create specific used-car modeled audiences that have shown incredible success.” 

In a recent case study, after evaluating that campaign model's results against a control group of households who met high lifetime value criteria but were not served display advertising, Semcasting found that after six months, in addition to the campaign audience conversion being 3 times better, the average profit generated by the campaign audience was 17 percent higher than the control audience.

Profit generated from the campaign totaled $78,600 from 15,233 households, while the control group only generated only $61,700 with 42,039 households — more than double that of the campaign.

Additionally, for a 60-day period, all devices associated with the campaign audience were reached at an average frequency of three impressions per day, per household, according to Semcasting.

“Dealerships need to be thinking more about the life cycle of that customer, and by focusing on the customers that not only will purchase a vehicle, but have the propensity to service that vehicle in the future, that’s really the roots of where this product came from,” added Murphey.

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