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Brian Pasch

Brian Pasch CEO

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Big Data Needs A Reducer Valve

The 2012 DrivingSales Executive Summit (DSES) was one of the most impressive automotive conferences that I have attended. 

The conference attracted close to 1,000 attendees, which more than doubled attendance from last year.   Congratulations to Jared Hamilton and the DrivingSales team for a job well done.

 

A popular thread to many of the speakers and workshops at DSES was “Big Data”; a new term for car dealers but not so new in other industries.  The term refers to how businesses can leverage the massive amounts of structured and unstructured data that is being collected every day electronically.

 

One example of structured data is the information that is typed into checkout forms on websites like Amazon.com.  Following this example, unstructured data would be the history of page views and clicks consumers make on Amazon.com while shopping. Unstructured data can also include how consumers came to the website; organic search, paid search, social media, or a referral link.  Amazon can use your past purchases (structured data) and your shopping style (unstructured data) to display certain products as recommendations on each page. 

 

The use of Big Data by Amazon.com is designed to increase sales and enhance the customer shopping experience.  Applying this to the automotive industry, why wouldn’t dealership websites present a customized version of the site for each shopper based on their personal shopping behavior?   This is a rhetorical question, but we first have to understand how that data in “Big Data” is collected.

 

If you have looked at Google Analytics reports for a dealership, you will see that a segment of customers visit the dealership website multiple times.  Automotive website providers have the “ability” to track repeat visitors and also to store what actions they took while on the dealership website.  Despite the ability to capture this data, only a few companies have taken the initiative to use historical data to help dealers sell more cars.  

 

Websites like Amazon.com, Expedia.com, and Travelocity use shopper data to change the website experience dynamically. Using this “on-site” information, website companies can present a customized experience without the need for data partnerships with outside parties.

 

Customizing A Dealership Website With Big Data

 

If we could use on-site data from a dealership website, a consumer who searched for used cars on their first visit to the website might see used car specials and promotions on the home page next time they visited.  A customer searching for a new and used Ford F-150 on the dealership website could be presented with an F-150 Coupon or promo on the home page on the second visit.  In other cases, dealers may want to offer up a general “incentive” when a consumer visits on the second or third time.  All of these examples will be a reality in 2013 as new versions of website software are offered to car dealers that leverage Big Data concepts.

 

For car dealers, limiting website customization to only what consumers are doing on their own website would miss the bigger opportunities that Big Data advocates promise.   Imagine a world where data “markets” are available where customer behavior and shopping activity can be passed to dealers to create a better shopping experience the FIRST TIME a consumer arrives to their website or contacts the dealership via email, phone, or chat!

 

Wouldn’t dealers want to know if the consumer who is visiting their website for the first time came recently shopped on Cars.com?  Autotrader.com? Wouldn’t it be helpful if a Big Data supplier also told the dealer’s website company that while they were on that third party website, they were looking at used Honda Accords?    How nice would it be for the customer to see home page promotions for Honda Accords when they arrived?

 

Or how about the case where a lead was submitted by a consumer and the dealership’s sales team marked it as dead.  Wouldn’t it be great to be notified if that same consumer is back shopping on your website or on a third party classified website?  Imagine how “timely” that call back to that prospect would seem from the dealership asking if they could still help them find a vehicle!

 

Once again, that data is only of value if the dealer’s website and/or CRM system could use that information to create a better consumer experience. In 2013 dealers will see updated automotive website and CRM software that will start to leverage “on-site” data with “off-site” data.  

 

Big Data Players

 

So which company has a rich set of off-site data that can be leveraged to improve dealership merchandising and consumer communications?  If you answered Dataium, that would be a logical choice since they have been the leaders in creating awareness about “Big Data” opportunities in the automotive industry.  Dataium’s cloud intelligence is being integrated into great products that are on the market today, like Hooklogic’s Lead To Show product, and more will come in 2013.

 

However, Dataium is not the only player to consider.  Think about the thousands of websites that ADP/Cobalt and Dealer.com manage.  They are smart cookies! (Sorry for the pun) These two companies record millions of consumer searches, clicks, and transactions each month.  Imagine the perspective that their business intelligence experts have on the consumer journey.  They have a wealth of structured and unstructured data at their disposal and it will be interesting to see how they leverage that data into their products.

 

Another key player is AutoTrader Companies (ATC), which consists of Autotrader.com, KBB.com, VinSolutions, Manheim, and others.  The combined dataset of these companies provides another “Big Data” lens by which customization and personalization can be achieved.   

 

So when you hear the term “Big Data” you can start to understand why so many people are excited about what is ahead for our industry.  Other large industries have been leveraging Big Data for years yet our industry is just in its infancy.  Big Data will answer some of the questions that have been haunting dealers for years, including which marketing investments are influencing consumers during their shopping journey.

 

Last year I wrote many articles inspired by Google’s book “Winning The Zero Moment of Truth” authored by Jim Lecinski.  Their research showed that consumers visited, on average, 18 online sources during their shopping path to purchase a vehicle.  Big Data will help shed light on which websites are the most important to consumers shopping for a vehicle in their local market.  It will also help dealers test customized marketing messages to increase conversion.

 

Downside To The Rush To Big Data?

 

Are there some downsides to the Big Data trend?  Privacy advocates as well as industry leaders warn about the potential for data sharing abuses.  All parties need to understand the language of their website and CRM data sharing contracts. Dealers will not want to be in a position where their local competitors are using their own data against them.

 

Dennis Galbraith from DrivingSales also brought up the need to standardization and normalization of data if dealers are to compare the relative effectiveness of similar marketing platforms. This will be something to watch as industry leaders seek to create industry wide data definitions.

 

Will dealers embrace Big Data?  I have some concerns that until dealers get a better handle on the data and reports that are being generated today, more data, from Big Data, may be undervalued. 

 

The Big Data discussion is a great opportunity to encourage dealers to decide which data elements from the existing vendor/system reports allow for business decisions to be made.  A data “audit” is a good discipline to create in the dealership because dealers will be getting MORE data options in the years to come. It is time to start managing the existing wide data pipe in the dealership; you can’t drink out of a fire hose! 

 

Let’s make a commitment to put the processes in place that create a “reducer valve” on the data pipe available to dealers.  I see the need to create a simplified set of multi-vendor reports that empower dealers to make better business decisions and not overwhelm them with nonsense.   I hope that the implementation of Big Data solutions are designed with the knowledge and attention level that dealers have to manage their business.

 

Big Data is exciting as long as it comes with a reducer valve.

 

Brian

 

Brian Pasch, CEO

PCG Consulting

732.672.2356

 

 

 

 

 

 

Keith Shetterly
Trying to put a reducer valve on Big Data is going to be like trying to hold back Sandy, to borrow on your point there. The far more fortunate case for Big Data is that it can be tuned and redirected, and parts of it can be streamed off to great success. We'll talk more soon about that! :) Glad you are okay and online. Keith
Michael Cirillo
Great post. I agree with what you are saying here. The point of big data isn't to overwhelm dealers. Rather, it is determining which data will play a role in making profitable marketing decisions. Great post! Glad you are doing well.
David T. Gould
Your point of "Dealers will not want to be in a position where their local competitors are using their own data against them." is a good one... I see the need for the reducer value on both ends of the hose. As always a very well written and timely posting. Thanks Brian. DTG
Derek Finke
Great written, Brian. I am with you and your thoughts and I am sure that dealers will use Big Data. But as you already wrote, in case it is too complicated to understand or to handle dealers will not see the real advantage in it. The more complicated, there longer it will need to be accepted. Here in Germany, where I live, too less dealers have already realized the importance of a website including rich content, an own CRM system, and correct prospect and customer data. Many dealers are only waiting for the next "order" given by their manufacturers or importers. And as long as they do not see any relevance, dealers say "There is no need". And regarding Big Data there is another Big Challenge: Data Privacy a hot topic in nearly all European countries. Germany is the country with the strongest data privacy law worldwide. And when I remember on the hot public discussion, when Google began to photograph just streets and buildings for its Street View service, I can imagine what discussion we will have about Big Data. Nonetheless, it is a brilliant tool to reorganize the dealer marketing. I am looking forward :-) And, Brian, I am happy that Sandy cannot stop you. Say hello to your team and especially to Carry!

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