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Big Data and Your Tire Dealership

How to effectively use big data and four challenges to managing it.

Big-Data-Tires

Video, podcasts, social media and blockchain are common buzzwords that you are likely to hear during marketing discussions. Each of these marketing channels, when used successfully, have one thing in common—big data—an accumulation of data that is too large and complex for processing by traditional database management tools. 

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Businesses in most industries, including automotive, are trying to set themselves apart from their competition by investing in technologies that claim to harness the power of data. These technologies make it sound simple: buy and set them up and consumers will flock to you and allow you to make tons of money. Sounds easy. 

In reality, technology that has the ability to harness the benefits of big data is not like plugging in an OBD scanner and getting a result. You can’t just buy the technology and set things in motion. Rather, you need to have the right marketing technologies that harness the type of data that’s critical to your business, a solid understanding of your data, and data-driven marketing principles that inform your analysis of the data.   

Here are a few key steps that auto business owners and their marketers should follow in order to ensure success through data-driven marketing: 

Challenge 1: Maintain High-Quality Data

Marketing is only as effective as the quality of your data. If your data is inaccurate, duplicative or even simply imprecise, the loss to your business can be measurable. Over the past few years, our team has regularly identified duplicate customer accounts, inaccurate mailing addresses, incorrectly spelled domain names in email addresses, and aged-out email addresses (if they exist at all), among other things, in the data set of our auto service clients. These types of data issues often lead to incorrect messaging, wasted dollars and inaccurate statistics. Correcting such issues routinely can have a measurable revenue impact for the business. This is why my team and I recommend quality control and data practices that highlight outdated email addresses, incorrect mailing addresses and duplicate accounts.

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Challenge 2: Identify & Track The Right Metrics

As businesses, we continue to collect data at a rapid pace. In fact, many businesses now have data overload. This is why it’s important to step back and ask the right questions such as, what is most important for your business? Is it important to generate additional new customers or bring back more repeat customers? Are you looking to generate tons of new visitors to your site? Do you prefer to generate lots of phone calls because they convert better, or do you prefer to bring in as many people into your stores directly? Are you looking to replicate a certain type of behavior in your customers?

The answers to these types of questions will help you identify the right metrics for your business. Once you decide on the right metrics, it is just as important to continue tracking those key performance indicators (KPIs) to determine whether the strategies you have implemented are actually working. Or, perhaps, your KPIs need some additional fine-tuning. If you are lacking this expertise internally, consider bringing on a consultant or team that excels in identifying, tracking and refining KPIs that are matched to your individual business needs.

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Challenge 3: Segment & Target Your Audience

Data from third-party sources (like lists) can be easy to acquire. However, first party data (i.e. transactional information from your own current customers) is much more actionable and valuable. It tells you a lot more about why current customers behave the way they do. Understanding that behavior can really allow you to create strategies that maximize opportunities. 

For example, my Conceptual Minds team identified that one of its clients has always done a terrific job of attracting high income, older customers who are willing to pay a premium for their service. So, in order to grow the brand, the company knew that not only did the business need to target more individuals who looked and behaved like their current customers, but it also realized that there were some demographic segments that were currently missing from their customer base—i.e. families and younger professionals. In order to really scale the business, it was going to be important to attract these audiences to the brand as well. 

This analysis of first-party data allowed us to successfully create marketing messages that targeted each demographic type effectively.  

Challenge 4: Breaking Down Silos

Aside from the difficulties of managing the high volume of data being collected by businesses, we find that the biggest problem companies face is the scattered sources of data. Some of the many channels that are rich with consumer data include websites, email, shop management systems (SMS), social media, etc. These data sets are often messy and only tell parts of the story. In order to see the whole picture, and to ensure that the best decisions are made, it is important for businesses to try and merge this data into a single source. I am the first to admit that this is no easy feat but the results can be incredible when it’s accomplished. 

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It is also important to recognize that you may not find this type of a solution within your industry, so you may have to look at what businesses are doing outside of your industry. A couple of third-party products with which our clients have found success include Oracle’s Eloqua, SharpSpring, Marketo and others.

Conceptual Minds’s assessment is that the automotive service industry is in the very early innings of effectively harnessing big data. Early adopters of new technology, with the proper marketing guidance, can take a strategic and tactical approach that would allow them to enjoy a competitive advantage for years to come.

Check out the rest of the April digital edition of Tire Review here.

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