Since 1994, IDOM, Japan’s leading buyer and retailer of used cars, has enjoyed success in the auto industry with a simple yet traditional business model: buy pre-owned vehicles directly from car owners and auction them to third-party dealers, or sell them to other consumers at retail stores.
In an increasingly frugal economy, Japanese
consumers are buying fewer new cars. Most young urban workers take public
transport, a cheap alternative for getting from point A to point B.
Additionally, people who do own cars are keeping them longer: the average
period of ownership is 7.5 to 10 years.
Although Japanese consumers are buying
fewer new cars, used car sales are steadily on the uptick. Pre-owned car sales
in Japan rose by 1.7% in 2015—the first big spike in three years. IDOM
dominates this industry with about 40% market share, and it wanted to continue
to take advantage of this growing market trend.
To do so, IDOM reinvented its marketing
strategy, using Google’s machine-learning technology to make full use of its
available customer data. The brand’s main goal was to attract more prospective
car sellers to its physical stores because (1) that’s where they could close
trade-in deals and (2) sourcing used cars efficiently is integral to the
success of its business model.
Secondly, rather than measure marketing
success solely on clicks, views, brand awareness, or favorability, IDOM relied
on data to determine which advertising techniques—including phone calls and
customized ads to prospective sellers—turned a real profit.
After successfully identifying and targeting
existing car owners with a high chance of selling their car, it was only
natural for IDOM to leverage this approach to identify and target potential
customers with a higher chance of buying a car—key for the other side of its
business as well. Thus, IDOM also showed customized ads to potential car buyers
and prioritized follow-up phone calls to high-value potential car buyers.
Find out how IDOM increased the number of
sellers and buyers visiting its stores by a whopping 25% and grew gross profits
by 300% in a key market segment. Download now!