In a world where “big data” is at the center of every industry, companies are constantly in pursuit of the best data to provide the best information to leverage to make the most money.
It sounds so simple, but there are several different sources of data and if it is not understood or utilized properly, it is ultimately useless to your company and your bottom line. So, what is data? Why is it important? What kind of data should your dealership be in pursuit of, and how can you use it to sell more cars? Driven Data is here to help answer all your questions and help you win the data game.
Types of Data
Across all industries, companies can source customer data either internally or they can purchase data from another company. The different sources for data are referred to as First, Second, or Third Party Data. When it comes to automotive, we will be looking primarily at First and Third party day and how to use them efficiently. It is always better to leverage first party data because this is the information you collect directly rom your audience and customers. You get to see data from your customers behavior, actions and interests demonstrated on your website or social sites, data from your CRM, or sourced from customer feedback such as surveys which can also be stored in your CRM. First party data is relevant, accurate, and very high quality. As a dealer, utilizing your first party data is key to market to qualified leads that are ready to convert to a sale. By utilizing first party data, your dealership can predict future patterns based on your current customer’s behavior, gain in depth audience insights, and personalize content and advertising to fit exactly what your customers are looking for.
Second party data is data that is sourced from another company’s first party data. This data comes from establishing partnerships with another company and sharing first party data with one another. This data can help you reach new audiences, predict customer behavior, and broaden your relationships with other companies.
Great! How do I use it?
Once you have your data, it is time to analyze it! There are four different types of data analytics:
- Descriptive Analytics: Tells you what happened in the past
- Diagnostic Analytics: Helps you understand why something happened in the past
- Predictive Analytics: Predicts what will happen in the future based off past data trends
- Prescriptive Analytics: Recommends current actions to take to affect a future outcome
When you use descriptive or diagnostic analytics, you are looking to the past to try and solve a current problem and develop strategy for the future. This is not effective because while historical data explains what happened in the past, it does not mean that it directly translates to what is happening currently. Also, by the time you review your historical data and create a game plan based on what happened in the past, too much time will have past and that plan may not be as effective to what you are dealing with presently. Therefore, it is recommended to use prescriptive analytics to leverage your predictive data based on historical trends and think forward to develop a strategy that correlates with what will happen in the future. By thinking towards the future and utilized data to curate the perfect strategy for your current needs, you are capitalizing on all the insights that data can provide!