3 Best Practices for Turning Clean Data into Revenue
In all industries, and certainly automotive, consistent data management practices are critical for effective communication, whether to prospects, unsold leads, or customers.
As Forbes tells us, dirty data “wreaks havoc on a company’s bottom line, costing companies a staggering 12% of overall revenue.”
Successful dealers need to focus on the person and how to use the information you have captured about them toward a better understanding of where they have been, which leads to where they are most likely to go. This allows you to focus on optimizing your efforts on how you engage consumers rather than executing marketing manually.
Here are three best practices for increasing revenue by making the most of your data:
Various vendors and third-party providers can help you standardize physical addresses to meet USPS standards, scrub email lists, and validate both physical addresses and email. Householding is also important, where you identify individual matched records and confirm whether they are an individual duplicate or unique individuals who are part of a household.
An effective marketing program should then be able to match and merge all this data and put all of it together in a single location with a comprehensive view. Companies that integrate their databases boast conversion rate increases of up to 12.5%. The reason this is so important is because siloed and dirty data leads to sloppy marketing and a poor customer experience.
Have you ever not had an email address for a customer and so you filled in a fake one, or maybe one with your dealer’s name attached to fill that field? DON’T DO THAT. In the long run, this adds more work, especially for the systems attempting to cleanse your data.
An ongoing data cleansing practice validates and scrubs email addresses for duplicates, undeliverable addresses, and more, removing potentially harmful domains or suspected SPAM traps. Outsell recommends regular email hygiene maintenance at least once a quarter, if not once a month.
Regular cleansing also makes for easier linked attribution and consumer engagement reporting, which leads to understanding which channel a consumer is most likely to engage in, where they are in their lifecycle, and what vehicle or service they are most likely to be interested in at any given time.
That knowledge is invaluable.
Various solutions can help you take consumer demographics, psychographics, previous transaction data, or whether a VIN is still owned by a consumer, as well as other attributes, to provide additional information on the type of consumer and their propensity to engage or transact with you.
Data enhancement can also be valuable to see how many of your consumers are prospective sales, service customers, or unsold leads, and it can reveal your transactional baseline of average new units sold versus used, as well as average services offered each month.
With the right partners, you can go deeper and deeper into validating phone records, appending additional phone numbers, adding street addresses where none may have been recorded before, and understanding what more you might need to do to your data to have it as clean as possible and actionable for your marketing and sales efforts.
So now what? What do you do with this data now that it is in the best condition it’s possibly ever been in? You could send out communications through your CRM, but your CRM can only send based on point-in-time triggers or time-to-transaction triggers. A CRM doesn’t account for deliverability. And a CRM is not observing behavior and triggering campaigns off those to be more accurate to a consumer’s needs.
This is where artificial intelligence comes in.
Given the demand for personalized customer engagement, artificial intelligence-driven technology is a critical component of any dealer’s marketing arsenal.
By taking data from consumer behavior—shopping patterns, browsing habits, past purchases, etc.—AI can help dealers interact with customers and prospects smartly, providing consumers with the information they desire at the time they most need it, rather than firing irrelevant messages randomly.
Outsell engaged RXA, a leading analytics firm, along with Experian to study the long-term impact of this type of lifecycle engagement. The study included 960 dealerships, 5.6 million consumers, and more than 63 million vehicle purchases over 3 years, as well as more than 60,000 cohorts—or segmented groups of consumers based on life stage, purchase type, and service frequency—from all brands and all regions across the United States.
The study found that consumers who received lifecycle communications were more loyal than those who did not, resulting in improved dealer retention and profitability across all customer life stages, including:
- 23% repurchase rate lift,
- 49% OEM loyalty rate lift,
- 31% service retention rate lift, and
- 65% gross profit increase per customer over three years.
Anybody can store data but understanding who each consumer is from data source to data source, consolidating that data, and using it to power personalized content & offers is where clean data becomes revenue. When in doubt, remember the 1-10-100 Rule: It costs $1 to check a record upon input, $10 to clean it later if the input is wrong, but due to the loss of revenue from dirty data, it costs $100 to do nothing.
Take a close look at your data and make sure it is being managed in a way that serves your goals rather than sitting stagnant.