In a car dealership, access to data analytics is vital. Dealers need to be able to use this information to make informed decisions and help their customers understand the total costs of ownership. This means dealers must be able to identify and collect the right data sets, clean the data to prepare for analysis, and standardize reporting across all departments.
Developing a data analytics strategy can sound daunting, but it doesn’t have to be. Essentially, it’s the process of designing and standardizing valuable reports and dashboards that will help dealerships understand their daily operations. This allows dealers to spot issues and opportunities, which translates into more revenue for their business. Car dealers face many challenges today. From diminished loyalty to inventory shortages, a lot is going on. To survive in this ever-changing industry, leveraging data analytics for car dealers to predict what’s happening and prepare for the future is vital. Dealerships that use predictive modeling sales platforms can leverage their existing and new 3rd party data to identify the best opportunities for their businesses, reach high-funnel shoppers, and increase profitability. Ultimately, data intelligence gives managers a crystal-clear image of loss and opportunity, empowering them to boost sales, increase efficiency, and improve customer experience. This is what makes data analytics so crucial to the automotive industry.
Car dealers that rely on customer data can extract more value from existing client relationships and develop a customer-centric approach to prospecting and sales. However, data is often scattered across multiple databases and can be unwieldy to manage without a robust data analytics platform. Centralizing data makes collating, analyzing, and sharing more straightforward, allowing dealerships to conduct sales and marketing activities more profitably. Progressive dealers use predictive analytics to understand customers before reaching out to the dealership, helping them proactively market to the customer in a highly personalized way. This may include advising them of the best option when turning in a vehicle, allowing them pre-order their next car, or preparing them for a lease-end purchase. This data-driven approach helps dealerships increase the number of quality leads that convert to sales and ultimately build a more substantial customer loyalty base. In a time when new technology is driving buyers online and away from showrooms, the dealers that remain ahead of the curve will benefit the most.
Better Customer Service
Data analytics tools allow car dealerships to identify their audience and tailor marketing campaigns that pique potential customers’ interest. They also help deliver the most relevant and accurate information to their customers. This results in better customer service and improved brand loyalty. Dealerships collect massive data, but it is often held in disparate databases and can be difficult to standardize and use effectively. Data analytics solves this by centralizing data and providing a unified view of all the relevant information in one place. Workshop records, vehicle sales invoices, and customer details can access the same platform, enabling the service team to proactively retain customers and entice back lapsed ones with attentive service.
Similarly, satisfaction surveys can be targeted to the right customers using data that has been cleaned, checked, and categorized. This gives the dealership the insight to make the necessary improvements. This enables the dealership to increase profit margins by eliminating inefficiencies, improving sales, and reducing costs. It also allows them to grow their market share.
Increased Customer Satisfaction
When dealers provide better customer service, they can improve their bottom line. Using data analytics tools to improve the sales and marketing processes can help a dealership achieve more efficient business practices and offer superior customer experience, ultimately leading to increased profits. For example, predictive analytics can identify customers due for a service appointment and alert them with a personalized message, increasing customer retention rates and enticing them to return. Similarly, analytics-delivered clues can alert a finance department to customers close to their lease end date and begin communicating with them preemptively to offer a new vehicle or other incentives. To take advantage of the benefits of data analytics, dealers need to develop a strategy for their systems, identify the relevant data sources and set priority goals. This requires aggregating data from internal and external systems and making it easy to understand with visualizations and dashboards. Developing this system can protect dealers from used-vehicle market volatility and help them build a sustainable business model.
Increased Customer Loyalty
A data analytics strategy can improve the loyalty of existing customers. This can be achieved by sending customers messages about keeping their car in good shape or offering a special deal for service, such as extended warranty coverage. This type of messaging can increase customer retention and customer lifetime value. It’s also important to remember that retaining existing customers is less expensive than acquiring new ones. Data analytics tools can be used to identify the customers most likely to buy from your dealership and design a marketing campaign tailored to them. In the automotive industry, predictive analytics (often considered a buzzword) are becoming a core differentiator for dealers that use them well. Predictive analytics uses historical data to predict future outcomes using statistical techniques like machine learning and predictive modeling. This makes it easier for car dealerships to meet potential buyers where they are rather than waiting for them to return to them. This type of marketing can increase customer loyalty and lead to more sales and revenue for a dealership.