Increase Dealer Profits with Data

Have you ever heard the term "data is the new oil"? We get the idea that data is valuable, but just how valuable is it, and how do you use it??

Raw data is the information that every dealership, OEM, or organization has and stores in a Data Management System. It is valuable but won’t help the business's bottom line without being cleaned, refined, and enhanced.?

The Problem With Raw Data in Automotive?

There’s a problem with data in the automotive industry. There’s no standardization. Raw data sits in each DMS separately, and although some information might be similar, there’s no way of knowing it because dealerships and OEMs don’t have a standardized code system.?

For example, an oil change at one dealership could be input as “OC,” at another, it could be “OIL.” There’s no standard set of entry codes for services, sales, products, etc. This makes it extremely challenging for the raw data received from dealerships or OEMs to be refined or used directly from the DMS.?

Where Does Raw Data Come From??

Raw data comes from the dealership’s daily activities and the metrics it chooses to track. These could include the number of services or repairs, the sales per month, the number of website leads, the effectiveness of chosen marketing campaigns, and more.?

Each dealership is an ecosystem of data. Every employee, customer, vehicle, and action taken leads to data that the dealership can use to gain insight into how their operation is doing and what can be done in the future to further their efforts.?

At this stage, the data itself is there. Still, it’s not clean, updated, or standardized, so using it will be a challenge, and combining it with other DMS data to inform wider decisions will be even more complicated. This is also a challenge for dealerships who want to use their data to help their sales staff or provide their customers with updated information.?

Getting True Value Out Of Automotive Data?

Automotive data can be transformative for dealerships and vendors, especially when standardized and enhanced.?

When a syndication tool like Authenticom’s DealerVault is used, dealerships can share their data directly with vendors at a reliable ingestion speed. This means vendors gain access to clean, standardized data that they can use immediately to enhance a dealership's business.?

The dealership can see where their data is going, who has access to it and gain insights from it to fuel their business and make better decisions. With DealerVault, the dealer can also turn data feeds on and off as they wish. This is quite a game changer, as many dealerships still don’t have control over their data.?

When data syndication occurs, the dealership can turn that raw data into refined, extremely valuable data.?

For example:?

A dealership provides a marketing vendor with data. The vendor then enhances that data and runs it through an algorithm to determine which people in the surrounding area will most likely purchase a new vehicle within the next 12 months. It then determines which people are most likely to respond to mailers or other forms of advertising. These are valuable insights!?

Putting Data To Use For Dealerships?

By using a tool like DealerVault, automotive dealers can track their metrics and use their data like a vendor. Here are some of the metrics dealerships would benefit from knowing:?

Used To New Ratio:?

Achieving or exceeding the volume of used retail units compared to new retail units is a hallmark of a thriving used vehicle department, provided the dealership is hitting its targets for new vehicle sales. A dealership must effectively combine acquisition, reconditioning, and retail strategies to excel in the used-to-new ratio.?

Market Pricing:

Dealerships must match their price with the vehicle's overall condition and the market. By leveraging data, they can aim for maximum profit and adopt a competitive pricing strategy, allowing them to find opportunities to exceed their profit window. This data also will enable them to make better decisions when taking on inventory and evaluating which vehicles are likely to sell within a specific timeframe.?

Inventory Turn Rate: The inventory turn rate measures the ratio of in-stock vehicles to monthly sales. Dealerships selling at a reasonable rate can see turnover every 20 to 30 days. To achieve this level, a dealership's internal structure must be efficient. Tracking this data will allow the dealership to make strategic decisions and gain insights into other dealership areas.?

Reconditioning Time and Cost :?

If a used vehicle needs mechanical, technical, or cosmetic repairs, the dealership will pay these costs and recoup them on sale. The amount of time it takes to make the repairs also affects the sale value, as the longer a car sits on the lot, the lower it is usually priced to move it. Tracking the time it takes to recondition a vehicle and the cost of these repairs is crucial for a dealership to understand the value of a car and whether it is worth adding to its inventory. Over time, the dealership will recognize patterns that can be used for future vehicle trades and purchases.

The Future Of Automotive Data?

The future of automotive data is in the hands of the dealers. Each dealer should have control of their data and be able to use it to reach customers, cut down expenses, gain leads, and create effective marketing campaigns that drive results.??

When dealers can turn raw data into valuable actions, everything becomes clear, and they can become excited about their businesses. Every dealer, vendor, OEM, and other company in the automotive space deserves to feel good about their business. The correct data can do this by providing the means to get a clear overview of everything that’s happening from the customer service level to the manufacturing level.?

Are you interested in learning more about data syndication? Visit www.authenticom.com and take control of your data with the best tools in the industry.?