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Data analytics for car dealers is forcing the automotive industry to adapt and evolve, making it a real difference-maker for those who incorporate it to make business decisions.
The auto market faced various challenges in 2022, from chip shortages and resulting inventory challenges to ultra-high competition and cost pressures.
Most analysts expect these difficulties to linger into 2023 (if not longer), and dealers with the highest chances of success will use these analytics, combined with predictive intelligence, to make data-driven decisions that better anticipate future market trends.
This article lists and discusses five of the benefits of using data analytics.
Data Analytics for Car Dealers: 5 Benefits
1. Knowing What Customers Want
Every dealership must compete for customers, making it crucial to understand their needs to enhance the customer experience and establish long-lasting connections.
Access to large quantities of data makes personalizing customer interactions more feasible, and as more dealers supply these tailored experiences, customers will come to expect them.
Those experiences should include the following:
- Meaningful conversations
- A streamlined journey across touchpoints
- Thoughtful recommendations
- A demonstrated effort to get to know the customer
Supplying these experiences requires collecting multiple client identifiers into a single ID, including pertinent data like phone numbers, emails, and physical addresses.
Customers now connect with companies across all industries through various channels, making it necessary to combine traditional and digital data sources to understand customer behavior properly. Additionally, customers demand and expect contextually relevant, real-time experiences, which all businesses – including dealerships – must provide.
2. Using the Customer’s Preferred Communication Channels
As mentioned above, personalization is critical, and while many dealerships struggle with structured data, they must learn how to respond to clients who communicate with them through various digital platforms.
These interactions might come in the form of any of the following:
- Phone calls
- Text messages
- Social media posts
- Online chats
Real-time response and personalization are valuable outcomes of using data analytics for car dealers. By understanding the thoughts and preferences of the client to help personalize in a multi-channel service environment, big data enables dealers to adjust interactions to the consumer’s persona.
3. Tracking High-Quality Leads
Dealers can collect data at every point in the customer journey with the correct technology.
Any of the following information could be included in this data, creating a data fingerprint specific to its owner:
- Extended use of the mobile app
- Participation in online chats
- Conversations on available social media platforms
- Number of digital clicks
This concept is like the one described above, except dealers are not using this data just to find communication channels to interact with would-be customers. Instead, they track who is most active and likely to do business.
4. Providing Relevant Services
When sales and trade-in volumes struggle, fixed ops revenue can be critical to keeping the dealership above water. However, it is often a vast undertaking.
Management should collaborate with service departments to identify trends that outline the strategic roadmap for specific offerings, including the following:
- New products
- Updated services
- Timely promotions and discounts
Effective analytics combined with comprehensive data collecting from direct or third-party sources where people might post their thoughts on what services and parts they need (and what they can afford) aid dealerships in making their service departments more competitive.
5. Enhancing Customer Experiences
Poor operations management can lead to several expensive problems, including a significant risk of crippling customer satisfaction and brand loyalty.
Analytics-based planning, management, and optimization of business processes encourage effectiveness and efficiency in exceeding customer expectations and achieving operational excellence.
Data on consumer demand and company requirements can be used in advanced analytical methods to improve productivity and efficiency across operations.
Due to an end-to-end perspective and monitoring essential operational factors, the best use of data analytics for car dealers will also guarantee the implementation of ongoing improvements.
Vehicle inventory serves as a helpful illustration, especially given the market today. Direct costs and dealership profitability can negatively impact having too many or too few vehicles.
Data and analytics can help inventory management by making sure that the dealership completes all its tasks efficiently, including:
- Required sales staff
- Required customer service staff
- Cost-effective vehicle delivery
Data and analytics can assist with decision-making and inventory strategy by giving transparency into the current and projected inventory situations.
Making the Best Decisions Requires the Best Solutions
Leveraging and correctly using data analytics for car dealers to realize the benefits mentioned above can prove a complex endeavor. Finding the insights necessary to make the best business decisions requires all-encompassing, data-driven technologies that offer a comprehensive, end-to-end picture of your dealership’s operational activities.
Contact us today and discover how DealerLens, Affinitiv’s newest innovation, can help you make data-driven decisions that predict a volatile market and outpace competitors.
All | January 26, 2023