BECOMING A DATA-DRIVEN DEALERSHIP
Prosarena | 4th June 2019
PSA: Digitalization is coming for the dealership industry.
Are you and your data prepared?
DEALERSHIPS, AN INDUSTRY DISRUPTED
Dealerships today are facing changing customer expectations and decreasing profits. What was a “fat and happy” industry back in the ’90s is beginning to feel the strains of competition. And the dealerships that don’t start making moves to innovate with the market face significant risk looking ahead.
The industry as a whole is facing pressure from multiple different sources. Mainly, new technology and industry disruptors like Carvana and Vroom are moving the buyers online and away from your showroom. Combine that with a generally more-educated buyer, and dealerships’ reach and margins are steadily shrinking.
In fact, industry research predicts that 10-25% of new vehicle purchases will be made online by 2030, with that figure doubling for used vehicle sales.
These numbers underscore the need for dealership organizations to digitize to save their profit lines – including finance and insurance (F&I) offerings which threaten to leave the dealership with an increase in online vehicle purchases.
WHY BEING DATA-DRIVEN MATTERS
So, what’s a dealership to do?
To remain relevant and protect profits, innovative dealers must take strides to improve both their operational efficiency and better understand their customer base. This begins and ends with your data.
A data-driven dealership is any dealer that gathers and applies data to reach their business goals.
This may sound like a lofty definition, but it is achievable.
We doubt there is a dealer today that doesn’t want better insight into their current sales and margins. And who wouldn’t want real-time reporting on daily operations? The key is to develop a strategy for your data, determine how to bring all your data together, and then design valuable reports and dashboards to support your goals.
STEPS TO BECOME A DATA-DRIVEN DEALERSHIP
1. DATA STRATEGY
Developing a data strategy can sound daunting, but it doesn’t need to be complicated!
A data strategy simply involves understanding your systems, data sources, and priority goals. It’s the vision for how your data will help you be more profitable in a changing marketplace.
To start, you need to audit all your various data sources. This includes both your internal dealership and marketing systems as well as external information sources related to the industry.