What is Big Data?
“Big Data” was the big trend at NADA this year. Sounds impressive, doesn’t it, big data? Walking the convention’s exhibit aisles gave the impression that any dealership not tuned in to big data was in big trouble.
Big data is nothing new. It’s absolutely on the mark, however, because it’s become so critical to profitable automobile dealership operations. Originally, big data was a term that IT professions used to describe large quantities of difficult-to-process data. Used by general business today, it defines the use of data to serve customers better and, reasonably concluded, also make more money for companies who know how to leverage and capitalize on it.
Take an automobile dealership that is not leveraging the data it collects and produces as it conducts commerce. It becomes a lagging dealership, because it’s not exploring and creating additional opportunities for revenue.
Big data gives us a better, more productive, and more profitable way to market, sell, and service vehicles. Growing numbers of dealerships are heeding this call, especially when it comes to creating selling opportunities that lagging dealerships simply would be hard pressed to know about.
Almost all of today’s dealerships, and increasingly tomorrow’s, are at the mercy of solid, quality data, because numbers rule. Numbers define the objective; numbers hide or reveal the opportunities.
Dealers and their managers who embrace this truth are those:
- Scrutinizing their data to learn their lead closing ratios and which lead sources are the most profitable.
- Identifying their service advisor strengths and developing opportunities.
- Studying F&I metrics and increasing aftermarket profitability to increase per vehicle retail and penetration rates.
- Identifying the most productive sales opportunities.
It is increasingly clear that this idea of leveraging big data to widen the competitive gap is already reshaping the landscape from which car dealers engage buyers and sell cars. For instance, big data is giving dealers unique abilities to segment customers, package attractive make and modes, and offer outreaches, specials and promotions according to such parameters as:
- New Model Upgrades
- Equity Position
- Contract Expiration
- Excess Mileage
- Warranty Expiration
- Lease Pull Aheads
- Conquest (Serviced but not Sold)
- Service Specials and Coupons
Using the right pursuit innovations with these big data finds many dealers today are selling more vehicles every month at or near MSRP.
For a helpful book on big data and the auto industry, visit autoalertweb.com/solutions_ebook.asp.