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As holidays approach, offer the right incentives to the right consumers

October 30, 2020
The latest advanced data technology and targeted marketing resources are poised to potentially make the year’s final quarter the most wonderful time of this very strange year for auto dealers.
2020 began with auto sales expected to approach the 17-million mark. Projections dipped to 8.74 million in April with the rapid and widespread shutdowns from the COVID-19 pandemic but climbed back to 15.18 million by August.
 
Holiday shopping
Auto dealers and lenders have felt the sharp back-and-forth swings of the pandemic economy and are hoping to ride upward momentum heading into the final stretch of 2020. As part of this, gearing up for year-end sales and incentive-fueled holiday shopping promotions are sure to be a big part of the game plan.
Overall, retail forecasters predict a 1% to 1.5% increase in total U.S. consumer spending from Nov. 1 through January, and a 35% bump in seasonal online sales.
Dealers are hoping to grab a piece of that by leveraging the right target-marketing data resources. With unemployment rates at an all-time high, it is important to understand a potential buyer’s household income and discretionary spending so that the right incentives are offered to the right consumers.
New target-marketing data resources help dealers better identify consumers who are likely to be ready to take on new financing for an auto loan or lease.
Those resources also can better match those consumers to vehicles that dealers have in supply, based on how many such models consumers likely will be able to afford. This is important because dealers and their marketing partners must re-evaluate their strategies in 2020 to better align with changing consumer needs and financial capacities.
The COVID-19 pandemic certainly slowed economic growth, but in a way that’s different from past recessions. This year, consumers have been impacted in different ways during the pandemic. While some have increased savings and lowered debt, others have lost their jobs or experienced salary reductions.
Financial durability has become an important way to segment the economic health of households within the same credit bands. It considers a consumer’s assets, income from dividends and interest, retirement income and the relationships between income, debt and spending.
Today’s sophisticated economic anonymized marketing data resources tap this information to help dealers make better and more precise decisions when putting an incentive-driven offer in front of a specific customer.
Median credit scores, revolving credit utilization, monthly disposable income and debt-to-income ratios all are stronger today than during the Great Recession. Also, household deposits are four times as high, according to Equifax data from June 2008 to December 2019.
 
Programmatic audience marketing strategy
Another way dealers and marketing partners can see a better response from holiday incentives is to shift their traditional media strategy to a programmatic audience approach.
Successful programmatic strategies are based on truly understanding the in-market shopping audience. However, just because a consumer is shopping for a car online doesn’t mean she can purchase it.
For example, first-time buyers may have no idea if or what they can afford, and the waters have been muddied further by the pandemic economy. They may be shopping for a vehicle online without knowing whether the payment fits into their budget or if they can get credit.
Dealers and their marketing agency partners need to identify several intent signals, as well as financial capacity to target consumers who have:
 
Income and assets: an anonymized estimate of household wealth based on data from trusted financial institutions.
Discretionary spending ability: a household’s spending power after accounting for the fixed expenses of life.
Credit capacity: estimated ability to obtain credit to purchase a car.
Propensity to buy: interest in your vehicle segment, make or model.
With these strategies in place, dealers can better leverage today’s advanced target-marketing resources to make the most of their holiday shopping incentives and offers this end-of-year season.
 
 

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