Could Data be the Holy Grail?

In talking with a Tim Hayden of Brain+Trust about the significance of Data within the dealership it was once again proven that most stakeholders aren't leveling up to its potential. Together, we established by means of confirmed conversations we both shared when talking to dealers the variance between perceived and actual customers was substantial. Personally, I cannot count the number of times I have spoken with a dealer and heard a database number that far exceeded reality.

Why is that... My personal opinion it's the easy calculation.

We've been open for 27 years and we sell 2,000 units per year so we have 54,000 customers. Forget that this math is in error. How about people from Fixed Ops... Service, Parts and Collision? Most dealers Fixed Ops have a significant amounts of customers that have purchased elsewhere only to service there. If we were to estimate this number to be low at 40%; a dealer could say the number of customers might be as high as 75,600 in this scenario.

But really what is this potential number? Number of purchases, that is all. They are NOT all customers.

To find the number of customers we have and actual active customers a data cleansing must be completed as it's critically important for the functioning operation of a dealership. In doing so parameters must be set to reduce purchasers to customers, simplest being duplications, most complex being active ownership or engagement ie. when does a purchaser no longer be a customer. Once this is completed, I am confident the above number of 75,600 would be reduced to a more accurate number of 30,000 customers of which 12-15,000 would be considered active, in this case scenario.

With this data set the possibilities are endless not to mention the significant cost reduction that can be attributed to this understanding. No longer would we be marketing to dead leads (pardon the statement, but it could be true). We could strategically target campaigns with pinpoint accuracy dramatically improving conversion while decreasing costs. Customer experience would increase as direct involvement or contact could be measured with specifics.

Think about inventory and turns. Knowing your data and aging you can potentially predict the needs given the additional opportunities from Fixed. If you gained the 40% and that customer base is different from your sales history the needs of your inventory will be different than your historical choices. Having clean data that you can extrapolate from will be immensely important to reduce flooring costs. It could also drive CX upwards knowing that you have the right model mix for your demographic customer making it a science rather than a dart shot.

More so collectively if you were a multi-rooftop group wouldn't you want to share this data with the rest of your rooftops. At the last Premium Luxury Group I work with their system was designed so the data was shared within the group as their mindset was you purchased from the group not a single store. Developing this required a huge amount of trust but the offset was CX that was second to none. If a customer had an issue or was in need of anything their history was immediately available for superior engagement.

Think of the customer that gets a flat and the closest location for assistance is a sister store. That store gets them in and looks to the records, finds out there tire and rim protection on the vehicle, knows exactly how to bill and gets the customer on their way. Then they notify the selling dealer and that dealer sends a note to see if everything is ok and satisfactory. What is the customer going to do? Talk about the service for weeks.

There are so many roles clean data can play within the dealership when actioned properly however to maximize these opportunities one has to understand the task at hand and plan accordingly. Cleaning data is just the start, what you do with it afterwards is just as important. Moving forward do you have the people and processes ready for this new idealism? Are they accountable for the new data? What is going to be your focus with this new treasure trove of opportunity?

Now, let's implement it with other services such as true omni-channel retailing and single point contacts. Watch the CX climb. Add in a Retention Management Program and true community engagement through data acquisition the foundation for marketplace domination will be set.

So when you think of your data when you go to the DMS and pull a record search is it really accurate. If there is any question then it's time to call in the experts, like Tim Hayden.

Peter Smith is the Managing Partner & Founder of Lion Partnership. He and his partners have decades of experience in the retail automotive and related fields within the industry. Contact them today for a consultation.