Why Dealers Need Big Data

Your common-sense understanding of how people buy is all you need to harness big data and generate big rewards

Marketers are always talking about big data. What is it exactly and what, if anything, should auto dealers be doing with it?

Big data is typically defined as a data set too large to be analyzed using conventional means, ruling out anything in a spreadsheet, and any customer or prospect database a dealer maintains in-house.

So why should automobile dealers care? Because third-party automotive big data is available that can help them improve their marketing and sales results. Three key questions dealers typically ask:

  • Do I need big data?
  • How can I leverage big data?
  • How can I put big data to work?

Is big data necessary?

Automobile dealers need and can benefit from big data. We’re not talking about a giant prospect database. This is about getting the data you need to identify in-market shoppers and understand buyers that visit your store. Big data can provide the insights needed to successfully close the sale.

Third-party big data sets can also help dealers do a better job segmenting their customer and prospect base to better target their campaigns. Examples include household data, shopper behavior data, and demographic data.

Third-party data can also help dealers understand what transpired since the last purchase; for instance, did the person start a family, relocate, or see a significant bump in income? This data helps you present more-relevant offers, and also builds trust and loyalty because it shows that you understand their changing needs.

How is big data leveraged?

Start by asking, “Who are the customers and what do they need?” Answering this question should be the main objective of any dealer’s big data initiative.

You probably have some basic data on customers already—contact information, contact preferences, vehicle(s) currently owned, service history, and maybe some basic insights (click data) on what they are looking for in their next vehicle.

Third-party big data sets offer information you can merge with your own in-house data, such as:

  • Credit data. You know a person is in the market for a Corvette, but how do you know if the buyer is qualified? Credit data can help ensure your salespeople spend their time with qualified prospects.
  • Auto shopper behavior data. Automotive data utility companies specialize in tracking anonymous click behavior across automotive websites—not just at your dealer website, but also third-party sites and competing dealers and brands.
  • Demographic data. Age, marital status, number/ages of children, and employment status all provide valuable insights that can help a dealer recommend the right vehicle and better target marketing efforts.
  • Buyer readiness. Services are available that identify buyers currently active in the market. You can get a clearer picture of customers already in your pipeline, and also know when a current customer or retired lead has re-entered the purchase cycle.

These data sources can help you engage customers with relevant marketing communications, and focus your sales team on the right customers and prospects so that your dealership can sell more vehicles.

Begin by mapping out the purchase life cycle for several customer segments, such as Family SUV, Commercial Truck, Sports Car, and Luxury Sedan. Then consider what data would help you improve the relevancy and accuracy of your marketing to each, such as family size demographics for Family SUV, employment information for Commercial Truck, and income and lifestyle data for Sports Car and Luxury Sedan. This will help you focus on your data needs.

Next, identify third-party data sources that can supply the data you need. A good place to start is your local agency or marketing solution vendor, which may have access to the data you want and the expertise to help guide you. Failing that, there are a variety of data providers to choose from, ranging from major players like Acxiom, Experian, and Polk, to smaller companies such as Relevate, which feature tailored offerings for the automotive industry.

There are also companies that provide analytic models and services to predict the lifetime value of young buyers, which customers are most likely to defect or remain loyal, or which customers are most likely to respond to a particular offer. When these predictive models are used as the basis for marketing campaigns and ongoing communications programs, response rates can double or even quadruple.

Big data may appear daunting. Think about your objectives and the types of data that could support those objectives. Start small, buy only the data you need, and learn from every campaign. You don’t need to be a data scientist to be successful. Your common-sense understanding of how people buy—and the reasons they do—is all you need to harness big data and generate big rewards.

Big data can help you market more effectively and sell smarter, not harder.

Dan Smith, CMO of Outsell LLC, is an innovative software marketing executive with over 20 years of experience in the enterprise software industry. Outsell continues to lead the market with its award-winning Outsell Fuel customer-engagement platform, and driving the ongoing evolution of its cross-channel marketing tools, turnkey programs, and analytic insights for leading automotive brands and their dealers.

Dan Smith


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