CRM is NOT Big Data

An industry consultant recently posted a blog on "big data" describing how three Lexus marketing executives had used search and database tools and data resources to improve sales lead generation.  The only problem with this story is that Lexus, and Toyota, face some very real big data challenges, but sales is not one of them.  More importantly, lead generation is not big data - it's not even customer relationship management.

https://tinyurl.com/zjt4rz2 - How Lexus Gets Results Using Big Data

Toyota, and the automotive industry in general, faces a huge challenge in maintaining contact with customers and managing those relationships.  This has been made painfully clear by the inability of car makers generally to find cars with outstanding recalls - and get those recall repairs closed. 

The owner of a Ford truck was killed in South Carolina in December by a flawed Takata airbag, just the latest fatality resulting from Takata airbags used in a wide range of vehicles and subject to a widespread recall.  Senators Edmund Markey (D-Massachusetts) and Richard Blumenthal (D-Connecticut) sent a letter to President Obama this week seeking an expansion of the Takata recall.

The Takata recall is but one manifestation of an automotive industry still focused on moving the metal (and plastic and carbon fiber) off the lots with little regard for the product or the customer after the sale.  Toyota and most other car companies don't have a problem generating leads.  There is a huge industry built around car shopping and lead generation. 

The problem lies in understanding how the product is being used after the sale and how the customer experience can be curated after the sale.  What few people seem to realize is that car companies and dealers don't start making money until AFTER the car is sold.  The real challenge, value and profitable revenue lies in maintaining and curating the aftersales experience.

Toyota and Lexus are special cases when it comes to aftersales.  The buyers of these cars are brand loyal and the cars have the lowest cost of ownership in the industry.

As measured by Experian, Lexus had the 10th highest level of brand loyalty and Toyota was number two.  The low cost of ownership means both companies produce highly reliable vehicles which further means that the average Toyota or Lexus customer spends very little time at the dealership.

Toyota also makes it very easy for independent shops to service its cars, so those Toyota and Lexus owners have plenty of options if they don't want to take advantage of Toyota's generous free-service programs, intended to keep the customers coming back.

Unfortunately for Toyota, in spite of its solid reputation for reliability, the brand has seen its share of recalls - which is what one would expect from a market leader.  But Toyota's reputation for reliability means the brand struggles along with the rest of the industry to find the current owners of its cars to ensure recalls are closed and corrected.

It also means that Toyota has limited visibility to how its cars stand up to wear and tear from both a hardware and software standpoint.  It was significant that Toyota was the first brand to debut a satellite-based software updating technology in partnership with Kymeta at the North American International Auto Show in Detroit in January.  Clearly Toyota recognizes the need, long term, to be connected to its cars and its customers primarily for the purpose of sending software updates.

The point is, Toyota's challenge isn't finding customers or even holding onto customers.  Toyota's biggest challenge is ensuring enduring long-term customer bonds through its dealer network.

American Honda has implemented a recall notification in some its cars that come with wireless connections.  Honda has also enabled service notifications and live service scheduling working with Time Highway and Cox Automotive's xTime. 

These applications, simple as they sound, are not big data use cases, but they represent an on-ramp for data collection, customer behavior and vehicle performance measurement that can infuse big data platforms.  More importantly they offer the twin benefits of saving lives and amping up profitable aftersales revenue opportunities.

Big data is at the heart of establishing and maintaining long-term customer relationships.  The need for these connections has become clearer than ever with the twin threat of rising recalls (2015 was a record year with 51M vehicles recalled, according to the U.S. National Highway Traffic Safety Administration) and the growing threat of cybersecurity failures.

A growing proportion of recalls (already as much as 50%) derive from software flaws that threaten the functions of critical vehicle systems.  The rise of wireless connectivity means that no car is secure.

It isn't enough for car companies to send their dealers sales leads.  The reality is that dealers are pretty good at generating their own leads.  The real challenge for car companies like Toyota is to give dealers the tools to better bond with their customers.  It is very much in Toyota's interest and the interest of any car maker to keep customers in their service network.

Every customer touch is another data point that can be used to better understand customer behavior, preferences and the performance of the vehicle and all of its related hardware and software systems.  This is the real big data challenge - not lead generation.

Cars last upwards of 11 years on the road, on average, so the challenge is great.  The latest drivers to be killed by flawed Takata airbags were owners of cars that were nine years old or older.

A nice small data challenge would be for car makers to put their lead generation resources to work finding ALL of the current owners of recalled vehicles.  Piston Data in Santa Ana, Calif., performs this function by cross-referencing multiple databases from insurance companies, wireless carriers and satellite radio subscriptions.  But, again, this is small data, not big data.  But better to start small than not at all.