Customer approach: potential for the tire industry

The tire industry has the best prerequisites for marketing that addresses customers in a needs-oriented and selective manner. However, companies often make insufficient use of existing data for communication. “Many have not even started with personalized customer communication,” says Andreas Pfeil-Schulz. He is the CEO of EELOY AG, which specializes in marketing automation and supports over 400 car dealerships in Germany.

With highly personalized communication tools, content from different data sources is processed and merged. “The aim is to display different content to different target groups or customer segments with common characteristics,” says Andreas Pfeil-Schulz. “This is a complex project, because existing ‘knowledge’ about customers should be used to enhance advertising messages with relevant information. The relevance is different for each individual customer,” emphasizes the expert. “This places high demands on data quality and the data models that create such highly complex classifications.”

In consultations, Andreas Pfeil-Schulz observes that bricks-and-mortar retail attaches too little importance to three key figures: Customer Lifetime Value (CLV), which represents the total value of a customer for a company over the entire duration of the customer relationship. Customer Acquisition Cost (CAC), which describes the total costs incurred by a company to acquire a new customer. And the Customer Retention Cost (CRC) indicator, which describes the costs of maintaining and retaining existing customers.

“Calculating and analyzing the customer retention cost (CRC) is important in order to evaluate the efficiency of customer retention strategies,” says Andreas Pfeil-Schulz. “This ensures that the expenditure is sensible and profitable in relation to the Customer Lifetime Value (CLV) of existing customers. A well-balanced relationship between Customer Acquisition Cost (CAC) and Customer Retention Cost (CRC) can be crucial for the long-term success and profitability of a company.”

For Andreas Pfeil-Schulz, the most important prerequisite for a needs-oriented customer approach is to make a decision: “The management's decision to put the customer at the center of its actions. However, due to the challenges of their own day-to-day business, many find it difficult to perceive (their own) world from the customer's perspective.” The second prerequisite for Pfeil-Schulz is “employees or service providers who are familiar with databases and can program. A lot of development work is required here. And since we are working with personal data here, the data protection requirements must of course be observed.”

The third requirement for him is “strong nerves or composure”. “Even if you work with the utmost care, unpredictable effects can occur during data processing. When algorithms produce an individual result for each customer, it takes time for those responsible to gain confidence in the technology.”

In the future, artificial intelligence could offer new opportunities for customer-oriented communication. “We are already using AI today to continuously optimize the success of campaigns,” says Pfeil-Schulz. “AI determines the appropriate content from the large amount of data collected on existing customers. Without modern algorithms, it would not be possible to achieve the necessary precision in the display of relevant content,” emphasizes the marketing expert. “Generative AI will support us in the future with the creation of individual worlds of motifs. Those who are prepared to go the extra mile in terms of customer orientation do not necessarily have to fear competitive disadvantages. I am sure that we all have a good sense of whether someone is serious about us.”

Andreas Pfeil-Schulz is CEO of EELOY AG and describes himself as a technology-loving customer centricity evangelist. At THE TIRE COLOGNE 2024 on 5 June, he will shed light on the potential of the topic with a presentation on “Highly personalized marketing in the tire replacement business” .