EXECUTION: Uncovering Big Data's Missing Piece

by David Metter

The greatest marketing trends of all time began as insignificant ideas that eventually gained enough momentum to reach a critical tipping point – the point in which uncharted tools and technologies once overlooked by the masses are adopted by the mainstream. When ideas reach their tipping point, an infectious, unstoppable domino effect goes into play. The undiscovered becomes discovered, the unfamiliar becomes familiar, and the unknown becomes universal truth.

Just as the adoption of CRMs exploded in the early 2000’s and mobile marketing reached its tipping point circa 2014-2015, I believe big data has reached its culmination in 2017. I know this because I’ve seen the distinct black and white clarity today’s automotive data has finally been able to give to car dealers. 

For the past several years, dealers have lacked significant visibility into their market regarding:

• Where and how they’re losing sales
• Who they’re losing sales to (whether the customer is purchasing the same make or another brand entirely)
• If sales are lost due to internal or external factors
• True successes, failures, and trends tied to each salesperson, lead or traffic source, inventory, day of the month, zip code, etc.
• Close and defection rates for all your leads and lead providers
• Validation that you are stocking the right inventory and marketing it in the most efficient manner

… the list goes on.

What we know now is that all of the items listed above are finally within reach. It’s also important to note that the problem has never been the data. It’s that dealers have only been able to view sales trends within their own CRM and DMS. How can you possibly improve your sales effectiveness if you’re only comparing it to yourself? The inability to see the sales and defection trends of top competing dealers and brands in your market has been a HUGE roadblock for dealers... until now that is.

Today’s big data landscape has evolved to become 100% executable. We can quickly gain insights from data using a scientific approach that exposes lost sales by source at an aggregate level. By knowing your lost sales opportunities, who you lost them to, and where you lost them, a strategic path towards increasing sales and reducing defection rates naturally comes into view – despite what your market conditions may look like.

We can even take it a step further and look at success and defection trends tied to an individual person within your sales staff. For example, if someone has a high close rate AND a high defection rate, you can break down where these lost opportunities are coming from. You can see that person is being assigned way too many leads and then you can make smarter decisions in terms of how you divide up your employees’ responsibilities. 

When you can see where you’re losing sales across the board, you can then align your conversion goals, the operational training of your staff, and the way you drive traffic and leads into your dealership – so you can have the highest quality lineup of opportunities to close.

The advent of integrating automotive data to make more profitable operational decisions is similar in many ways to when CRM and DMS technologies were first implemented. Using these tools gave you a way to organize and streamline your process to help you sell more cars. The ability to execute smarter sales strategies using data analysis is no longer alchemy. It’s the current reality of this instant gratification world we live in, and it’s the weapon dealers need to be unstoppable.

Is Showrooming Stealing?

Consumers have been showrooming in retail stores for quite some time now and, while many retailers don’t like it, they’ve pretty much resigned themselves to the fact that it’s going to happen.  However, one surprising argument posted in an article by speaker, trainer and consultant, Bob Phibbs, went so far as to make the claim that showrooming is akin to stealing.

In his article, he explained that while consumers conduct a large part of their research online, they still love to touch, feel and physically look at products, which they cannot do on the Internet. His viewpoint is that retailers spend tons of money to have nice stores, great product displays, staff and inventory. Then they see consumers come in with the express intent to research the product they are interested in, just to leave and buy it for a better price elsewhere, or online.

Along the same line of thought, one disgruntled retailer chose to take this route in attempt to combat showrooming:

Isn’t this being a little small minded about where commerce is truly headed? To be successful in business we must all be willing to change and adapt with the times to some degree, or get left behind.  This extreme measure by the retailer will probably serve to deter more business than it gains. Can you imagine having this in your car dealership? 

Wouldn’t it be better to provide free Wi-Fi, and a great shopping experience and win customers over while they are at your dealership, rather than drive them away with unfriendly business practices?

The fact is that showrooming is here to stay -- it has become a natural part of consumer shopping behavior. Rather than trying to fight it, it perhaps makes more sense to explore ways to embrace it and use it to our advantage.  Think about it, the bottom line is that this practice could actually be driving MORE leads into your dealership, if you’re competitive in the marketplace. Perhaps the point is how you handle these leads once they arrive.

Is the Internet An Enemy To Car Dealerships?

A 2014 study by Autotrader showed that consumers are visiting fewer dealers in their car shopping than ever before. This is certainly a by-product of the availability of information. No longer do consumers have to visit multiple dealerships to find the right vehicle. They simply sit in front of their computers and browse a dealer’s inventory on their website or, more commonly, a car buying portal site. In fact, the same Autotrader study showed that 79 percent of consumers are using the Internet in their car-buying process.

When the consumer has completed their research, decided upon a vehicle and visited a dealership to view and/or test drive it, many don’t actually end up buying the vehicle they came in to look at. They end up finding something more suitable to their lifestyle, or one that is a better fit for their budget.  

They arrive at the dealership, armed with all their Internet research -- ready to do battle should they experience anything less than a frictionless experience. However, many find themselves in a situation whereby they are perhaps not quite as ready for battle. Perhaps they now feel they will be at a disadvantage at the negotiating table.

So what does THIS consumer do now?  

They whip out the one thing most consumers never leave home without -- their smartphone, right in the dealership’s showroom, and start shopping the competition. A 2014 survey by J.D. Power and Associates revealed that 34 percent of new-car buyers who research online use a smartphone or tablet while shopping at a dealership, up from 29 percent in 2013. Vehicle pricing is the most frequently accessed content while at a dealership (61 percent), followed by model information (42 percent), searching inventory (40 percent) and special offers/incentives (36 percent). 

If consumers are so armed to the teeth with information, why do 61 percent access information on vehicle pricing while at a dealership? Most likely because they changed their minds while viewing the vehicle and landed on a car other than the one they came to look at. This use of smartphones by dealership customers to research the inventory of other competing dealerships may well lead to an increase in dealership visits.

You can’t buy a car from the Internet – not yet, at least – so it might be wise to consider that the buyer that walks through their door with the MOST information is the one that you should ensure gets the BEST customer experience. As they, according to the J.D. Power study, are the ones likely to visit more dealers.

When consumers are shopping for a vehicle, they may think they know what car they want to buy. However, studies show that they can easily change their minds while at your dealership. And, if they are shopping your competitor’s inventory right from your lot, they may also change their minds about if they want to buy a car from YOU.  Give your customers a good reason to buy from you versus any competition, and perhaps you’ll find less resistance, happier customers and more sales.  

In the end, the Internet is not a dealership’s enemy.  It provides us all with much needed information and services that can be much harder to find elsewhere. Consumers will use it whether you want them to or not. Embrace technology and find a way to use it to your advantage. If you still don’t agree, just remember the old saying:

 Keep your friends close and your enemies closer.

Polk to Discuss Passive Lead Scoring in March Webinar

Last month we wrote about passive vs. active lead scoring here on our blog. In this post David Metter explained how the practice of lead scoring was co-created with Polk and that while somewhat controversial, the practice of scoring leads is ultimately a smart choice for most dealerships. The part that is controversial is more about the idea of assigning a score to a lead for your sales reps to size up potential customers, and not so much about the importance of knowing the real potential of each lead coming in to your CRM. We agree that it does not behoove the dealership to know the score that each person has been assigned, after all, the score is only temporary. We do believe however that it is important to know each person's real potential to become a customer. Thus the practice of passive lead scoring was born.

To score leads, people coming in to your CRM are evaluated based on certain criteria using an algorithm that helps identify where about in the buying process a person might be. With passive lead scoring, an action is taken that is appropriate to their current situations as opposed to blanketing everyone with the same message.

This action is not a conscious or deliberate action that a sales rep takes because of the person's score, but an action that is automatic and unknown to the sales rep all together.

In our case, this action is an automated email offering the recipient an incentive for coming in for a test drive, something that a person with a low score is not likely to be interested in whereas someone with a higher score might be.

The result is that more qualified buyers appear in the showroom for your reps to work with, less time is spent courting people (or annoying people) that aren't ready for the showroom to begin with.

Lead Scoring Discussions Led by Polk

To talk about this important topic, we have invited our lead scoring partner Polk to lead discussions this month on the significance of lead scoring and the process that Polk goes through to score dealer leads. Representing Polk will be Senior Solutions Consultant Mark Pauze.

Since starting with Polk, Mark has worked closely with clients to understand their diverse business, research and analysis needs, developed solutions to meet those needs and directed teams to deliver customer solutions. He works with clients to help focus their consumer and industry intelligence efforts and develop integrated solutions that will address their needs. Mark has been focusing his efforts most recently on lead marketing at Polk and has worked with a wide range of customers on diverse lead marketing solutions.

Webinar Registration Link

A webinar will be held on Friday March 16 in our Advanced User series for auto dealers. To register, click the link below. For more information about the AutoHook Webinar Series, visit our post titled, AutoHook Webinar Training Coming in January.

Friday March 16 at 11:30am EST (For Dealers) - REGISTER HERE