What Dealers Can Learn from the ‘Godfather of Big Data’

The Sit­u­a­tion:

What IT peo­ple nowa­days call “Big Data” is what CEOs and lead­ers – includ­ing Deal­er Man­agers – describe as Data Invest­ment Man­age­ment, and British­er Sir Ter­ry Leahy is con­sid­ered the God­fa­ther of Big Data. Why? Because he made it work in favor of his com­pa­ny to increase prof­its by at least 25 per­cent.

What does this mean for Auto Deal­er­ships?

With the acqui­si­tion of sophis­ti­cat­ed soft­ware that deal­er­ships use today, an enor­mous amount of cus­tomer data is being accu­mu­lat­ed – but it is hard­ly being put to use.

The Back­sto­ry:

Sir Ter­ry Leahy is the for­mer CEO of Tesco’s, a British retail indus­try that grew its mar­ket cap­i­tal­iza­tion 10-fold in eight years while its chief com­peti­tors’ mar­ket val­ue fell.

Says Leahy: “The hard­est thing to know is where you stand rel­a­tive to your cus­tomers, your sup­pli­ers and your com­peti­tors.” There­fore, it is imper­a­tive that auto deal­er­ships should be invest­ing in their own Data Invest­ment Man­age­ment strate­gies.

Take­aways from Leahy’s Analy­sis of Cus­tomer Insight:

  • Cus­tomers are the best guide – they have no axe to grind.
  • Fol­low the cus­tomers – but learn from the com­pe­ti­tion.
  • It is cheap­er and more prof­itable to hold onto exist­ing cus­tomers than to lure those of com­peti­tors.
  • Cus­tomer data is price­less – a bet­ter under­stand­ing of cus­tomer data improves pro­duc­tiv­i­ty and helps retain waver­ing cus­tomers.

Action­ables for Your Deal­er Man­ag­er Right Now:

  • Col­lect­ing, ana­lyz­ing and act­ing on the insights revealed by cus­tomer behav­ior, both at the deal­er­ship and online, is the best guide to deci­sion-mak­ing.
  • Get rel­e­vant data into the hands of deci­sion mak­ers at all points in the deal­er­ship.
  • The more data shared among staff and sup­pli­ers and cus­tomers, the more trust is estab­lished – and trust is the most pro­duc­tive com­mod­i­ty in busi­ness.
  • Good data and good process­es work hand in hand with trans­paren­cy and con­sis­ten­cy in motives and val­ues – a pol­i­cy that brings cus­tomers back, and accord­ing to Leahy, “If you do that they will stay with you for a life­time, and that’s where you get your return on invest­ment.”

Recent arti­cles by Ian Tom­lin of DrivingSales.com and Ian Grant of Com­put­er­Week­ly were used to put this mate­r­i­al togeth­er.

 

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