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Your POS System is a Data Mine and Can Improve Your Marketing

Your Point-of-Sale (POS) system holds a substantial amount of data about your customers and the products they buy. So, if you are just letting that data sit around, you could be missing out on a treasure trove of marketing data. Experts from the research company Growth from Knowledge (GfK), which gathers tire sell-out data from tire dealer POS systems across the country, and the Tire Industry Association (TIA) urged dealers to utilize that data in a recent webinar about useful marketing techniques. They identified the most important part of marketing as using POS data to market to a specific customer base.

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“We want [tire dealers] to send customized offers, designed to meet [the customers] needs. We like to say, ‘send the right message to the right customer, with the right discount at the right time using the right media – that’s a recipe for success,” says Neil Portnoy, managing director of POS tracking at GfK.

Portnoy explains that target marketing, or marketing to a specific customer, is a much more effective tool than any other form of mass marketing. In other forms, results often vary, but with target marketing, dealers can pinpoint the exact customer and tailor an offer to their needs based on their vehicle’s maintenance intervals.

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Portnoy recognizes that with a rough last couple of years, everything from supply delays to staffing challenges may have halted or disrupted marketing efforts for tire dealers. In order for dealers to take advantage of their target market, Portnoy says they should first understand the challenges that are present and learn how to overcome them.

“Competition is fierce,” says Portnoy. “We have heard from not only tire dealers, but from their ad agencies and marketing firms that results from marketing are spotty. We want tire dealers to feel comfortable if they make an investment in marketing that they’re going to get an acceptable ROI [return of investment] on it. To do that, they need to measure the effectiveness of the dollars they spend.

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“[Measurement] is really about getting smarter and learning and going back to the market with more confidence that you are going to get the desired ROI from your marketing dollars. We believe there are big challenges, but we also believe that if we’re smart about it, we can overcome these challenges.”

Your Target Marketing Strategy

Dave Stevens, vice president of POS tracking for GfK, details six important steps to fully unlock the potential of your POS data. Those include:

  • Having access to your POS data;
  • Grouping vehicles into categories;
  • Summarizing data to develop customer/vehicle profiles;
  • Deciding on key performance indicators (KPI) to influence actions;
  • Implementing those actions;
  • Measuring all the results once finished.

“That’s really what segmentation is,” he says. “The key element is the ability to summarize your data to develop customer or vehicle profiles. You’re looking at those car counts. And when you summarize those over different time periods, you can start to understand trends and see opportunities within your own stores and within your own areas to develop a focus.”

For example, dealers can group the type of vehicles that come in and the services provided for them into different categories, Portnoy says. Understanding the difference between customers who do not come in often for services (low-value) and those that do (high-value) along with grouping vehicles/services into categories will increase a shop’s ability to market toward a specific type of customer.

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Stevens explained that small or mid-sized tire dealers can implement some of these audience tactics on their own, in case they do not want to hire or train someone to be their marketing coordinator. He says with properly analyzing and segmenting POS data dealers can take advantage of social media advertising with Google, Instagram or other sites – but the most important thing to start with is the POS and make the most of that data source.

“With some simple analysis, some segmentations, some grouping of attributes, as well as summarizing that data, you can really start to identify areas where you can drive profit, bring in those higher value, higher-dollar-figure customers into your base and know exactly how to target them,” Stevens says.

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Portnoy looked to big-box retailers, which he says have been doing target marketing for years. He advised dealers to understand the composition of customers in their area, learn how to communicate with them, how to drive them in and how to find and attract more high-value customers (those who have work done at the shop regularly).

In this industry, there is always room to grow and enhance customer relationships no matter how much a dealer thinks they know their market already, Stevens says.

“[Dealers] understand their marketplace better than anybody,” he says. “Really what they could focus on here is the opportunity for more sustained profitability.”

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