A Dubai-based automotive tech start-up – MyDelfi – is aiming to induce fresh blood into the customer buying patterns and reshape the automotive dealership sector.
Its founder Dr. Roberto Kallookaran, a former Daimler executive, has also worked as management consultants in the automotive space in the Middle East and Europe.
Speaking to TechRadar Middle East, Kallookaran said that it was enough for car dealers to run a product-centric business a few years back as customers just kept buying cars and the market was growing in double digits.
But things have changed now; he said and added that demand for cars has dropped significantly, around 40%, and customers’ buying behaviours have changed.
“We saw a need to empower automotive dealers to transform into a customer-centric and data-driven retail business. So, we quit our job and started MyDelfi in 2018,” he said.
Moreover, he said that customers are switching from ownership to usage or new mobility concepts like Uber and Careem, and the immersive online product experience is keeping them [buyers] away from visiting showrooms.
“Car dealers in the region can learn from their peers in the United States, who have proven that a customer-centric approach built around data is effective to win in today’s environment. But lacking tools, infrastructure and data science capabilities are the key challenges for local automotive players to put this principle into practice,” he said.
Customer-centric approach
MyDelfi developed a business-to-business platform that allows the dealers to adopt a very customer-centric approach.
“What we do is they [automotive dealers] load the customers' data on our platform and we have algorithms which understand which customer is likely to buy a car and why.
"We listen to the information and we automate communication marketing such as emails and personalised videos only to targeted customers instead of a mass marketing using multi channel to ensure “marketing reach” and increasing their return on investment,” he said.
The product came to the market in 2019 and the company managed to get a Mercedes Benz dealer [Al Haddad Motors] from Bahrain on-board.
Before the internet, Kallookaran said the buying behaviour of a customer is to go to the showroom seven times before buying a car.
Digitalisation changes the game
“Digitalisation has completely changed the game and now the products are online. The moment you get into a showroom, you have already made up your mind which car to buy. Our predictive analytics predict which customer is likely to buy at a much earlier stage when your mileage is about to expire or when you are about to finish your financial loan or when you have changed your job.
“So, during this time, we target customers with tailored and relevant content in a bid to get the customer to the showroom much earlier. The acquisition is multiple times harder than retention.
Car is the second-biggest equity purchase of your life after the house,” he said.
There is only a mere 2% chance of a person opening an email if it is not relevant to a customer, he said. “So, we intend to reach you in a much-personalised manner and increase the open rate by a minimum of 10 times,” Kallookaran said.
Translating customer insights
The cloud-based technology analyses thousands of data points to predict customer buying behaviour and translates customer insights into relevant bespoke marketing communication.
Kallookaran said that dealers benefit from improved customer engagement leading to more car sales, higher returns on marketing investments and increased sales force productivity.
“Our business model is not confined to the Gulf States but we also have plans to expand into North Africa. We are in talks to board two more dealers, one from Bahrain and the UAE,” he said.
The start-up operates as a subscription model and its revenue model includes a fix component to access its platform and a variable component for marketing.
“Our job is to bring the customers to the showroom and it is up to the showroom guys to convince a customer to buy the car. After three years of a sharp decline in sales, the industry has almost bottomed out while growth is expected in 2021,” he said.
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