Developing a Data-Curious Culture at Your Dealership

AI, BI, Big-Data, Machine-Learning. These are just some of the buzzwords being thrown around in today’s business environment. Who benefits from these concepts and technologies? Is it just the big-box retailers or the industrials, or can your dealership use them too?

AI, BI, Big-Data, Machine-Learning. These are just some of the buzzwords being thrown around in today’s business environment. Who benefits from these concepts and technologies? Is it just the big-box retailers or the industrials, or can your dealership use them too? Once you get them, what do you even do with the data they spit out? Is the data just numbers showing vehicle PVRs or service hours per RO or can more meaningful insights be drawn which support such decisions as which vehicles to discount or how to manage parts inventories so as to maximize turn and minimize holding costs?

Drawing those insights across your dealership takes a certain data curiosity, which is defined as where employees seek data, new and existing, analyze it and use it as the basis of informed decision-making. Needless to say, since the days of gut-instinct are long gone, a data-driven approach to decision-making is essential in today’s business environment if you want to be competitive.

Unfortunately, today’s dealerships are not always fully leveraging the data contained with their DMS to make optimal decisions. Despite having the right technologies and software tools, there is often the absence of organizational data-curiosity, which stems from leadership down. The result is a culture, in which employees lack the inspiration to see data, question it and in doing so, advance the dealership’s business.

How exactly then, do you get your managers to become data-curious?

Link Data with Results and Success

An excellent way to develop organizational data-curiosity at your dealership is to show your employees that data drives insights and most importantly, tangible results. The people best positioned to demonstrate this are leadership, of course. Why? Because salespeople are busy selling cars and service advisors are busy servicing them. So, leadership has to take the time to leverage data and to get insights and then get employees to act upon the insights to drive results. In turn, this creates a more data-driven dealership.

Leadership can also quantify results. Measuring performance operationally or financially and examining the data that supports the metrics will compel employees to more closely examine the data. Consider compensation plans, for example. Employees scrutinize vehicle sales units or grosses or repair-orders or grosses to ensure they’re compensated accurately.

However, there’s more to data than just maximizing compensation. Making data central to drivers of success across dealership departments incents employees to leverage it to discover opportunities for improvement and success. This drives more innovation, efficiency and cross-dealership collaboration.

Turning Data Curiosity into Actionable Steps

Data curiosity is only useful when it’s actionable. In order to achieve this, employees and managers need to be empowered to seek process improvements or other improvements based upon their examination of data. This means that leadership has to trust managers and employees, where appropriate, to make better decisions based upon their analysis of data, while employees and managers should be driven to improving processes and finding solutions.

For example, if the service manager determines that a loss-leader oil change marketing campaign is not having the desired results in terms of customer retention or upsell, the manager should be empowered to work with marketing to modify or end the campaign so that service department capacity and marketing dollars are not wasted.

To facilitate an actionable data-driven culture at the dealership, employees and managers should be encouraged and incented to look beyond the simple numbers presented by their DMS. For example, if the DMS presents a number for F&I reserve per new vehicle retailed, the F&I manager should be driven to dig into the underlying transactional data to understand how it can be improved by increasing F&I financing penetration or using a different bank lender, for example.

Digging into the data often requires more analytical horsepower than natively available through the DMS. In fact, what’s often required is a centralized data management/business intelligence platform, which creates transparency across the dealership and a single source of the truth. This way, data is not just used to improve operational efficiencies but moreover to ensure that is it central to enterprise decision making.

In fact, only when dealerships foster a culture where employees are empowered to act upon data and provide the requisite tools, will data curiosity become widely adopted throughout the dealership.

Data Management Platform

For any job, the right tools can make a huge difference. Changing suspension springs on a coilover suspension on a 2002 BMW M5 takes infinitely longer with a vanilla parts-store spring compressor than it does with a BMW factory compressor. I can say this, having actually done the job myself. Similarly, compiling and analyzing data also requires the right job, namely an appropriate data-management and analytical platform.

A good platform makes data more comprehensible, digestible and actionable. In raw form, data is useful to only analysts and most employees do not have the time to be or are not analysts. So, the ability to query data, generate reports and visualize it through graphs, dashboards and reporting help employees derive contextual information and to then ask meaningful questions.

Data platforms should also be device independent and facilitate today’s mobile workforce. In fact, considering the time and effort required to install data management platforms, leaders need to ensure a selected platform will keep up with change and evolve with the dealership and its needs, especially as the auto industry changes.

In Conclusion

Data-driven excellence or culture can only happen with firm leadership support and advocation. Leaders first have to demonstrate why data is central to personal and organizational success before making the organizational shifts required for letting employees run with that and while providing a future-proof and flexible data management platform