In this fast-paced world, we live in, where everything from your workout routine to your grocery shopping is scheduled to the minute and budgeted to the penny, why do we resist the data-driven life? No longer is flying by the seat of your pants a viable long-term strategy. It’s time to accept reality. It’s time to embrace the fact that data is power.
But it’s not just about having data. It’s about understanding the data you have.
This has never been more apparent than in the automotive industry as the fallout of COVID has caused disruption across the world. Effective organization of any dealership’s data has become even more crucial to success. The question then becomes–How are you organizing your data?
If you are like me, you want to be able to set up benchmarks that illustrate your dealership’s strengths and weaknesses. By organizing your data into five basic categories you can create the framework needed to see those benchmarks clearly.
One: Analytics
I often have conversations where data and analytics are categorized as the same thing. They are not. Data is based on quantitative or qualitative information. Analytics is the study, or interpretation, of that data and shows your dealership the overall operation of specific segments ie sales, services, parts, etc. In order to fully understand and visualize any of the many scenarios your dealership may end up in, you must first have all of the information available to you. You must know everything that is happening in your dealership. If utilized correctly, these analytics will show you what is happening in your dealership. From the front of the house to the back of the house make sure to get your hands on every bit of information.
Two: Marketing Data
Despite arguments to the contrary traditional marketing still plays a pivotal role in dealership success and should be used in conjunction with a robust digital marketing set. More importantly, though, your marketing analysis needs to be focused on what is happening at the intersection of traditional and digital. Ask yourself, what are we doing to connect these two points, and how is that impacting business?
Three: Inventory
To make better acquisitions you need to have a strong grasp on what is moving in your market. Do you understand your inventory mix? Which type of vehicles are you selling the most of and why? What should you be buying? What is your average days on lot and how does that compare to your area?
Four: DMS
Comprised of your past and current customer base, your DMS is your most vital asset. Your service customers have built lasting relationships with your writers and are continuously saying “yes” to your store. Have you utilized your DMS to market to these loyal customers? From sales to service having this data allows you to tap into all past “yes” customers. Having this information readily available enables you to implement robust re-conversion strategies.
Five: Customer Base
Do you know what your demographic is? Do you sell to women or men? Are you more likely to sell a third-row mini-van or a two-door coupe? Having demographic data allows you to appeal to the right groups of people. If you don’t understand this data, you could be spending money marketing to the wrong data set.
In any given month, you can pull any of these five ‘levers’ to find the success you are trying to achieve. Adjusting your strategy based on these segments and utilizing them during your decision-making process will help you sell more cars.
The truth is, that the majority of your competitors are not looking at or organizing this information. They may have a handle on one or two of these segments but rarely all five. Dealers who succeed understand each set and are capable of leveraging them.
So how do you optimize your success?
There are two things you can do right away.
First, hire an analyst skilled in decoding this information. It is no longer possible for a dealer to thrive without a professional who is capable and directly focused on interpreting and reporting simple-form material that decision-makers can quickly consume and implement. It is no longer reasonable to have a GSM assuming the responsibility of interpreting this complex data. Your Sales Managers are there to motivate and ensure correct processes are in place for the resulting traffic your data is creating.
Second, have a place for your data to be filtered. There is going to be a lot of information and it is essential that you have a way for that data to be easy to access and easy to consume. One of the core principles at DTVMS is the importance of making it easier for dealers to do what they do best. The industry is at a pivotal point. The old way of doing things is rapidly disappearing and a new way is emerging. We are experiencing a paradigm shift in the automotive industry and the question is—which side of that shift are you going to be on?
Herb Anderson / Charity Ann