Auto Dealer Today: Fixed Ops-timization: Dig Into the Data

Mon. 11 Sep 2017

auto-dealer-monthly-300x250Sophisticated data analysis can unlock fixed operations opportunities and boost sales and service metrics

This article originally appeared in Auto Dealer Today

At a time when powerful new tools and technologies are making it possible to manage and leverage the vast amounts of data generated in an increasingly digital world, the emerging field of data analytics is making important inroads in a wide range of industries. The automotive industry is one of the places where data analytics is making a particularly significant impact. In fact, in the wake of the late-2000s recession, OEMs and dealerships have been proactive about using sophisticated data analysis to gain a better understanding of both their customers and their own operations, leading to new insights and, ultimately, new efficiencies.

Whether it’s optimizing operations or maximizing marketing, data analytics has the potential to deliver a significant bottom-line impact for a segment of business that is responsible for close to 80 cents of every dollar of revenue for many dealerships.

Insights and intelligence

The best fixed operations data analytics solutions can sift through an enormous amount of data (detailed information on parts, services, customers and operations) to identify hidden connections, reveal subtle patterns, and transform raw data into usable and actionable intelligence.

Predictive analytics use past information and key performance indicators (KPIs) to make informed predictions and provide specific and strategic recommendations. Decision-makers can use that information to structure programs and practices to meet customer satisfaction, reduce waste and introduce new efficiencies. For OEMs and dealerships, that impacts staffing and service specifics (making it easier to turn a single service visit into a pattern of repeat business) and efficient inventory management (ensuring that the right parts are available when a customer is ready to buy). Inventory improvements alone can have a dramatic, even transformative financial impact. For example, one prominent OEM recently saved nearly $80 million in recent years by optimizing its port-installed parts and accessories inventory to reduce wasted space and cut back on avoidable losses to aging and obsolescent parts. In a dealership, having the right parts in stock 30 days after a new car purchase is critical due to the high volume of parts and accessories being purchased then. Predictive analytics makes that possible, recommending daily inventory specifics months in advance.

This newfound ability to make sense of available data also gives OEMs and dealerships a better understanding of customer purchase patterns, preferences and priorities. That information facilitates the creation of personalized and strategically timed marketing and promotional initiatives that are extremely effective at driving business, building brand loyalty and shaping customers’ service habits. It also enables dealerships to provide a highly personalized service and sales experience. Vehicle- and customer-specific data can be leveraged to unlock new sales and service opportunities.

Platforms and possibilities

While no two data analytics systems are exactly alike, the best provide customized and user-friendly solutions designed specifically for fixed operations applications. Disparate DMS data feeds are integrated into a unified web-based platform, which decision-makers can access via a visually dynamic and intuitive virtual dashboard. Users can review a wide range of metrics, including detailed sales trends in individual product categories; inventory, parts and pricing information; service and operations data; and information about customer loyalty and retention. To ensure data integrity, the best providers have quality control resources in place to “clean” and audit raw data.

The ability to view KPIs and assess performance in the context of historical trends and predetermined benchmarks is a profound change for an industry which has traditionally been challenged by the sheer complexity and diversity of its operations. Data analytics turns that complexity from a liability into an opportunity. For OEMs and dealerships, the power to leverage the fixed operations data they are already gathering to realize improved performance and profitability is the very definition of a difference-maker.

Neetu Seth is founder of NITS Solutions, which works with a growing roster of automotive clients, and can also service data-rich industries like healthcare, retail and higher education, to transform information into intelligence by helping them navigate the intersection of big data, technology and marketing to design and implement custom programs that put information into action—ultimately leading to more effective marketing, enhanced operational efficiency and improved success. For more information, visit