Data mining refers to the process of analyzing large sets of data to determine patterns and correlations within the data set. Software is generally used to analyze the raw data and determine meaningful connections within the data. Data mining is a useful practice in a wide variety of different industries. Analyzing raw data from your business and looking for patterns within that data helps you figure out key factors that drive your sales—including the demographics of your customers, the percentage of your customers that are repeat customers versus first-time customers, and much more. Here’s how data mining boosts automotive sales.
Businesses that use data mining tend to acquire more new customers, access more new business opportunities, and have more success in general than businesses that do not utilize data mining. Data mining gives businesses an edge over their competitors by allowing them to better understand the buying patterns that drive their sales.
Many car dealerships fail to use data mining to their business’s advantage, but the automotive industry is actually one of the industries in which data mining can be the most useful and lead to the most success. Maintaining steady, high profits is key to any automotive dealership’s success. Keeping profits high depends on maintaining successful marketing strategies that not only draw customers to your business but also motivate customers to make purchases.
Most data mining in the automotive industry hones in on customers’ purchase likelihood and determines patterns that reveal the customers who are most-likely to actually make a purchase and which customers are most-likely to purchase which models—which helps car dealerships know who to target with their marketing strategies. Keep reading to learn more about three ways that data mining can boost automotive sales for your car dealership.
1. Sell More Vehicles
Data mining can help you cater your inventory toward the real needs and preferences of your customer base. You can use data mining to determine which individual and combined vehicle attributes are most common among the vehicles you successfully sell. For example, you can analyze your data through data mining to figure out that passenger sedans with tinted windows and LED headlights are flying off the shelves at your car dealership. Then, you can keep your eye out for passenger sedans that share those vehicle attributes and stock your dealership lot with similar models.
Increasing the number of models within your car dealership’s inventory that share the vehicle attributes that are most popular among your customers can majorly increase your sales. Using data mining to track buying patterns and trends at your car dealership can help you make informed decisions about which vehicle models with which attributes will make the best assets to your dealership’s inventory.
2. Find New Opportunities for Profit
Data mining in the automotive industry can reveal brand-new professional opportunities that your car dealership can take advantage of to increase your profits. Data mining reveals patterns, trends, and correlations in the raw data from your car dealership that you would not otherwise have known existed.
For example, data mining might show you that the vast majority of customers who purchased a hatchback vehicle from you in the last year were women in their 20s and 30s. You can utilize that information you would not otherwise have known without the help of data mining to aid you in targeting advertisements for hatchback models toward potential customers who fit within this demographic.
3. Build Stronger Customer Relationships
Data mining can help your car dealership build stronger, longer-lasting relationships with your customers. The insight you get from analysing your business’s raw data using data mining can help you learn more about your customers and their needs and preferences.
You can use data mining to help you target specific sections of your customer base with different marketing techniques. For example, data mining can tell you which of your customers are overdue to bring their vehicle into your dealership’s service center for maintenance. Armed with that information, you can target messages to all of these overdue drivers that invite them in for service and incentivize them to come to your dealership by offering special deals and discounts.
By addressing your different customers’ unique needs and desires with the data mining-informed marketing strategies you use, you can make your customers feel heard and validated by your car dealership—which in turn increases customer satisfaction and improves your dealership’s customer retention rate.
Contact us today for more information on how you can leverage data mining to boost automotive sales for your dealership.