What’s Your Customer Data Worth? - AutoSuccessOnline

What’s Your Customer Data Worth?

Your database is more than a receptacle for customer records. It’s a strategic asset that can be used to identify and communicate directly with the most valuable customers in your PMA, which in turn will significantly boost your gross revenue and profits.

Today, most dealers spend heavily on purchased media — both traditional and digital — not because they want to, but because they have no other way to reach consumers.

Imagine if you knew every household in your primary market area (PMA). If you knew how to contact them, their media preferences and their vehicle and service needs, you would never have to purchase another television or radio ad again. You would simply engage in ongoing, meaningful dialogue with the few thousand households that drive your profits.

The fact is, the data you have in your customer database right now is more valuable than your real estate or your inventory. Unfortunately, most dealers don’t realize the value of customer data, nor do they allocate an annual budget for investing in their most valuable asset.

If you can master this, it’s reasonable to expect that you can significantly slash your marketing budget while increasing your gross revenue 40 percent. But recognizing the value in data isn’t enough; you also need a strategy to capture and utilize data. Here are some guidelines.

Decide What is Valuable
The total number of records in your database means nothing unless you know who they represent, how to contact them and what their needs are. You can never know too much, so set a goal to acquire as much data as possible. Start with answering these questions:

  • How many households are in your PMA? This number can be obtained from census records.
  • What is the percentage of households in your PMA that you can contact right now? At a minimum, you want contact information for 90 percent, but ideally 100 percent.

Next, acquire the following data. It’s important to gather this information on all households, so that you can identify and infer which households are the most valuable customers to target.

Must-have data:

  • Physical address
  • Phone number
  • Email address
  • Income range

Media preferences: where they get their news, are they on Facebook or Instagram, do they respond to snail mail, emails or texts?

Vehicles owned; year, make, model

Nice-to-have data:

  • Interests and hobbies; do they like roof racks because they like to cycle, mud flaps because they like to four-wheel or a premium sound system because they’re an audiophile?
  • Shopping habits; do they value quality and service (Nordstrom) or price (Wal-Mart)?
  • Number and ages of children
  • Birth dates
  • Affiliations; charitable organizations, volunteer groups

Ascribe Value to Your Data
Dealers have always struggled with having salespeople and service advisors collect email addresses. The primary reason employees aren’t held accountable is because they, and dealers, don’t know what the data is worth.

Would it make a difference if you knew that every email address was worth $10? How about $20? $50? Is a phone number worth more or less than an email address? We know that a second form of contact is worth a lot more than a birth date.

It’s important to ascribe value to your customer data so that you can establish a current benchmark, set a goal for improvement and keep staff accountable for collection efforts.

It’s up to you how to assign this value. Consider creating a spreadsheet. It doesn’t matter if the values that you initially assign to your data elements are correct. Start somewhere, even if it’s arbitrary. In time, you will recognize the relationships between data elements and customer responsiveness; and you can adjust values accordingly.

Review your data and prepare to be shocked at how little you know about the households in your PMA.

However, your goal is not to achieve perfection, but to continuously improve the quality and quantity of your data. Also recognize that data is a depreciating asset, therefore some effort is required just to maintain the status quo.

Data collection should become a priority at every dealership. Customer data can be purchased from outside sources and it can be collected from employees. Strategies include:

  • Quarterly appending
  • Third-party leads
  • Experian vehicle registration
  • Curate new and lookalike audiences on social media and Google properties
  • Invest in community events and outreach
  • Leverage manufacturer programs to partner with local organizations and schools
  • Invest in conquest campaigns
  • Incent staff for most data collected

Your database is more than a receptacle for customer records. It’s a strategic asset that can be used to identify and communicate directly with the most valuable customers in your PMA, which in turn will significantly boost your gross revenue and profits.

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