Almost all dealerships are using data, but are they using it effectively to drive more sales?
With the proliferation of ever more sophisticated means of gathering and managing data, most dealers are already using some form of data analysis – but the sheer amount of data available, and the mystifying ways in which it can be leveraged, can leave many scratching their heads about the best way forward.
Regardless of business size, harnessing the power of business intelligence can be difficult to do. A NewVantage study of some of the biggest companies in the world found only one-in-four could describe their workplaces as a ‘data-driven’ organisation, and that statistic gets worse the smaller the business gets. Unsupervised showed in their report that small businesses, with fewer than 50 employees, were less likely to effectively gather, analyse or use data for decision-making.
However, it doesn’t have to be that way. Small businesses can benefit just as greatly from data analysis as can huge corporations. Companies of all shapes and sizes have reported increased efficiencies and improved financial performance through better use of data.
In the B2B environment, McKinsey identified four areas in which data analysis has been particularly effective – radically improving lead-generation, matching people to deals more effectively, maximising the lifetime value of each customer and leveraging dynamic pricing.
These are highly valuable to businesses of all shapes and sizes, providing they can make effective use of the data they have. As Kevin Cowell, partner at Calidore Computer Systems, points out, “The data that a dealer collects regarding their clients is one of the most important aspects of a good back-office system.”
We all know that, and yet there are still barriers to dealerships utilising the data they hold to its full potential. A 1Path study of SMEs showed that although businesses are using data analytics, many feel they don’t have the skills to leverage the full benefit. More than half (57%) said they don’t have the right people in the team to handle the data, while 62% said they needed more training.
What should dealers be looking for in their data?
Kevin is clear that we shouldn’t just be looking for the obvious – what sold, who to and how many – but also for whether we made a profit on that sale. For most businesses, this information is already at our fingertips, within our customer relationship management (CRM) software.
Knowing where that data is stored is step one. Step two is categorising it into a form that makes it possible to analyse. Most CRMs will be able to handle these processes, through normal order entry organisation or by creating pricing profiles and contract reports that are ready to analyse. More important, however, is knowing where the gaps in sales are happening. “For every bit of information we know about what they buy, we are automatically building our own information about what they don’t buy – and that is crucial,” says Kevin.
The gaps identified in sales can be used to target promotional offers to customers who are more likely to buy that product. For example, if you know a customer regularly orders a specific consumable for a certain printer, but hasn’t bought any maintenance equipment for some time, these products can be offered to that specific client at a special rate.
This sort of gap analysis can help retain business too – regular customers who have suddenly stopped purchasing should be a red flag. Did they find a cheaper supplier? Have their needs changed? Identifying and pulling out these accounts for attention can prevent the loss of a customer to a rival company.
Basic use of this data could inform a promotional email campaign, or a telemarketing activity, helping you to speak to some key clients directly to better understand their businesses. More sophisticated business intelligence systems may even be able to target specific customers right on the website, delivering suggested products or special offers individually.
Tools that can help
The first stop on the road to better business intelligence is Google Analytics. All businesses have access to this resource, and it’s an easy way to get to grips with some of the overarching trends. Looking at the traffic that is arriving on the website enables dealers to ask crucial questions. ‘Is there a specific geographical location that is performing well for us?’ ‘Is a particular region growing more than others?’ ‘What keywords are driving the most arrivals?’ ‘Which products have the highest click rates?’
All this information helps with getting into the mind of the customer. Understanding the influences that drive them to the website, that encourage them to click, and the niches that are performing well can inform marketing activities to effectively exploit these positive trends.
If you want to go deeper into analysing the data, a number of IT solutions are out there that can make it easier to get into the numbers. Calidore’s POWER-Gx suite brings more clout to Kevin’s business intelligence. “Our standard reports allow the dealer to identify profitable categories and the buying trends of any client. This can be consolidated into yearly activities or monthly trends, helping to identify seasonal fluctuations in buying behaviour. Further drill down into key clients allows dealers to see things like order size, number of lines, average sales value and more. Using this information will allow dealers to organise promotional blitz days – often in conjunction with key supplier promotions – targeting specific customers.”
Terry Thurgood, business intelligence director at Prima Software, noted that their PrimaVANTAGE software allows for multiple report creation, diving into specific products, jobs or customer segments to maximise sales opportunities. “Every dealer differs enormously in the way they operate,” he explained. “By taking a consultative approach to trends and attributes Prima Vantage can be fine-tuned to highlight critical business intelligence which is relevant to everyone’s needs.”
How business intelligence can transform sales
Translating all this data into action is another challenge, but there are a multitude of sales benefits ready to be unlocked with the power of data. For example:
Improve sales forecasts: knowing what to sell, who to sell it to, and when, will reap rewards in many aspects of the business. Inventory can be better-managed, supply chain disruptions mitigated, and higher profit margins achieved.
Measure effectiveness of marketing: getting to grips with what works best for your specific customer base is crucial, but this has to be taken in relation to the cost of the campaign – look at the profit, not just the headline figure.
Promote, cross sell, rinse, repeat: it’s much easier to encourage an existing customer to buy more than it is to acquire a new buyer. Knowing what they typically buy – and what they don’t – will enable targeted marketing to be sent their way.
Identify your key clients: who is your best customer? Is it the one that places a huge order once a year? Or is it that small business that comes back every month for the same few items? Using business intelligence will allow dealers to identify their most profitable customers, building a profile to help target similar prospects.
For Terry, there’s an additional benefit to data analytics, which could prove to be rather fun in the right office environment. “I have always been delighted at the influence of any business intelligence which creates competition across persons or teams. We have produced some fantastic, customised, league table-based portals and dashboards.
“For example, having a league table of KPIs – such as new business creation or quotation conversion – across all teams drives competition and supports new sales and marketing initiatives. Teams are compelled to engage as nobody wants to be at the bottom of the list!”
Without doubt, using data effectively can be a powerful sales tool, and a motivational tool for the team too, but it is also a great way to deliver more customer satisfaction. When customers feel they are known and recognised, that’s the best encouragement to keep them coming back, time after time.
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