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Big data has been a big theme for several years now, but many dealers still don't have a thorough understanding of what it can do for them.
I believe that's because the term 'big data' implies a sense of overwhelm or at the very least, something that is time-consuming.
I think when a lot of dealers hear the term 'big data' they imagine sitting down with piles of reports and experiencing a sort of analysis paralysis. How do you know what you're looking for, and who has time anyway?
That's why instead of 'big data' I encourage dealers to look at 'actionable data.' While big data implies a lot of data, actionable data can be a single number. While big data implies complicated, actionable data is simple. While big data tells you where you are, actionable data gets you to where you want to be.
Actionable Data is Empowering
Dealers who are able to harness the power of their actionable data spend less money and make more money than dealers who rely on gut instinct and/or years of experience to make business decisions.
To illustrate, I've outlined a few examples where big data may not be telling the whole story, while actionable data reveals a single version of the truth.
1) Internet Leads
At the end of each month, you review your Internet sales. Your 'big data' report tells you that from a total of 200 Internet leads received, you sold 20 cars.
If your goal is to sell more cars you may conclude that you need more Internet leads. Let's say you want to sell 25 cars. Do you increase spending on your pay-per-click (PPC) campaign or buy more third-party leads?
If you drill down into your Internet lead sources, you may discover that the lead source with the highest percentage close rate is your dealership's website. Drill down a little further and you discover that most of these leads are submitted between the hours of 6:30 pm and 9:30 pm at night.
That's your actionable data. To get more leads, adjust your PPC campaign's budget to allocate the most dollars between 6:30 pm and 9:30 pm
Your 'big data' report tells you that you currently have $10 million in new car inventory on your lot. Of that $10 million, approximately $4 million is over 120 days old.
What can you conclude from this data? Sure, you need to start moving metal. But which metal, and how?
To find out, drill down into that $4 million number. You may discover that you have $2.2 million worth of Silverados and that $1.5 million of those are two-wheel drive Silverados. There's your actionable data. You need to create a big incentive and build a marketing campaign for two-wheel drive Silverados, pronto!
3) Service Tech Productivity
Your 'big data' report tells you that your shop and technicians are running at 120 percent efficiency. That sounds too good to be true, doesn't it? But your service director insists it's true, because the DMS shows an average of close to 10 hours of labor per day, per tech in billing.
Just to be sure, you drill down. After all, there's no more truthful measure of a technician's productivity than their time clock. If a technician works at 120 percent efficiency, then he would be clocked in and out of various jobs to the tune of 9.6 hours per day.
But lo and behold, what you discover is that your techs are actually averaging 6.5 hours per day! This is an example of what I like to call "fake news," where big data is actually faking you out. Accepting this data is accepting the status quo, which in this case could be significantly improved.
Remember the next time you are looking at reports, the goal is not just to see where you are. The goal is to find out why you are there so you can take an action and change course.
Can the 'big data' in your manually created reports be trusted? Remember that every time there are people involved in a manual process there is room for error. People are busy. Personalities and judgments can get in the way of facts.
Finding actionable data doesn't have to be time consuming or difficult. Many of today's reporting solutions allow users to build custom reports that are run automatically at the end of each day, week or month. Drilling down is as simple as clicking on a number. A single number, or piece of actionable data, can paint a picture that's much clearer than a whole pile of big data.