Automotive Equity Mining vs. Data Mining: Why Your Dealership Needs a Sales Platform
Many dealers are driving sales and profits with automotive data mining and equity mining tools. Some however, are leaving profits on the table by using the capabilities those data and equity mining tools provide while failing to take advantage of similar opportunities in other parts of their business.
In this blog post, automotiveMastermind:
What is data mining?
Data mining involves analyzing as much information as possible about potential customers to understand the factors affecting a car purchase decision and to identify those customers who are most motivated to buy. Some of the factors that go into automotive data mining include:
Using the power of artificial intelligence, predictive analytics tools identify patterns and similarities to score prospects on their likelihood to purchase a vehicle and identify the highest-quality prospects for sales teams to engage with.
Auto dealers don’t need to be told the importance of “knowing your customer, and how understanding who they are and what they want can make the difference between closing the sale and closing the doors. Automating data analytics are a uniquely effective method of streamlining the process of getting to know your prospects and customers, efficiently mining more useful data than any human would ever be able to do.
What is equity mining?
Equity mining is a specialized subset of automotive data mining, focused on existing customers who are in a position to trade into a new car. Equity mining is the process of identifying those who have positive equity in their vehicles and could be profitably placed in a new vehicle with attractive finance terms. This isn’t just a calculation of equity built or payments remaining, considering factors such as factory incentives, trade-in value, interest rate differences and more.
Equity mining is a powerful tool because it empowers dealers both to identify valuable prospects and opportunities to generate revenue in new and used vehicle sales, fixed ops and F&I departments in one unified process. When equity mining tools identify a prospect whose leased vehicle will likely qualify for factory certified pre-owned status, most dealers can drive service and parts revenues by certifying and preparing that car for resale. That subsequent sale (or lease, if the OEM offers CPO leases) then offers other revenue opportunities, including F&I reserves, upsells and initiation fees.
Limitations of Data Mining and Equity Mining
Data mining and equity mining are powerful tools to drive sales, but they can only accomplish so much when they’re used as standalone tools, rather than as components in a comprehensive dealer sales platform such as Market EyeQ.
An analytics-based sales platform works with a dealership’s existing DMS to use and enrich the data they already have, while incorporating data from other public and proprietary sources to deepen that understanding to improve the process of equity mining or other forms of automotive data mining. For instance, Market EyeQ incorporates household demographic data from IHS Markit, consumer financial information from TransUnion and vehicle-specific insights from Carfax to improve your ability to identify which customers and which vehicles are the best trade-in prospects.
How is Data Mining Used?
Identifying prospects is only the first step in a sales cycle. Turning prospects into closed sales requires effective communication, which is where a sales communication platform such as Market EyeQ takes the insights from data mining or equity mining and turns them into a consumer-centered targeted marketing campaign that delivers the right messages, to the right people, at the right time, and in the right manner to maximize the potential for engagement.
Once the marketing has gotten the customer in the door, a sales platform like Market EyeQ arms sales and F&I teams with actionable insights, targeted offers, personalized talking points and other information that helps close deals.
After the sale, a sales platform continues to pay benefits when it’s integrated into service and customer relationship management, continuing to nurture the relationship while maximizing service revenues. Eventually, the sales platform will identify when a consumer is ready to re-enter the sales process and begin the cycle all over again.Data mining, equity mining and other big data analytics tools are already making a difference in dealerships across the country. Interested in how your dealership can improve its data mining processes and grow revenue with a comprehensive sales platform? Contact us today for a free consultation.