3 Ways Predictive Analytics Benefit Dealerships of Every Size

February 21, 2022 automotiveMastermind

The past two years have presented many challenges to auto dealers ranging from market conditions, increased competition, cost pressure and never-before-seen supply chain volatility. This has forced dealership leaders to continuously look ahead to try and predict what will happen next.

There have been some bright spots, of course, including record-high customer demand and dealership profits. But as inventory shortages are met with increased competition between rooftops and new online-only competition, dealers need to continuously think ahead to achieve sustainable success.

For dealerships of every size, predictive analytics have become crucial to this process, empowering dealers to improve the efficiency and efficacy of their efforts. In this blog post, we explore how predictive behavior analytics can benefit dealerships of all sizes and fuel their operations by answering:

·   What is predictive analytics for auto dealers?

·   How can dealerships leverage predictive analytics?

·   How can predictive analytics benefit the entire dealership?

What is Predictive Analytics for Car Dealers?

While once considered costly and complex, tools powered by predictive analytics are more available and approachable than ever. For auto dealerships, marketing tools powered by predictive analytics can aid in identifying and activating high-quality opportunities of all kinds – even before a customer begins shopping around or scheduling their next service visit.

Dealership marketing tools powered by predictive analytics automatically aggregate and assess insights. This includes  first-party data from a dealer’s equity and data mining processes, DMS and CRM, as well as third-party data from public and proprietary sources. The data can then be used to predict what consumers are most likely to do next.


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By incorporating and assessing key factors like sociodemographic data, personal behaviors and buying preferences, these tools empower dealers to understand the motivating factors behind a customer’s vehicle purchase. The more a dealer understands the wants, needs and behavior of their customer, the better they are at predicting what the individual is likely to do next in their buyer journey – and what messaging they’re likely to respond to.

How Can Dealerships Utilize Predictive Analytics?

Even with highly accurate equity mining tools, dealerships are still unable to connect with customers in truly personalized ways, leading many dealers to rely on ineffective spray-and-pray marketing techniques. With the right dealership predictive analytic tools, dealerships of every size are empowered to leverage data to understand their customer base on a deeper level. This results in more successful conquest campaigns, in addition to unlocking plenty of other valuable opportunities.

Mining Service for Conquest & More

The service department offers dealers numerous opportunities to engage customers on a consistent basis with personalized messaging. Whether it’s emails about service specials, text messaging reminders on seasonal promotions or simple maintenance reminders, by using marketing tools powered by predictive analytics, dealers can automatically send tailored service communications at key touchpoints. 


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Working the Drive 101: How to Maximize Service-to-Sales Revenue


Drive Customer Loyalty

To combat recent record lows in customer loyalty and defend their customer base, some dealers are using predictive analytics to identify the customers in their loyalty portfolio preparing to re-enter the sales cycle with personalized communications. This strategy enables dealers to proactively promote customer retention. They do this by automatically engaging loyalty customers with personalized messaging designed to retain their business, such as extended lease offers or service reminders.

Taking a similar approach using Mastermind’s intelligent behavior prediction modeling, our dealer partners report increased retention sales up to 15%.

Acquire Inventory

As ongoing inventory challenges drag on and auction prices remain sky-high, buy-backs and trade-ins have become critical for dealerships to maintain profitable and sustainable pre-owned inventory. Using marketing tools powered by predictive analytics, dealers can automatically mine their sales, service and loyalty portfolios for customers driving in-demand pre-owned vehicles well suited for a buy-back or trade.

By further using these tools to identify the customers who are likely interested in vehicles before they arrive on the lot, dealers are empowered to maximize their inventory turn for the long haul while driving customer loyalty.

How Does the Entire Dealership Benefit From Predictive Analytics?

As technology evolves and transforms the way customers and auto dealerships interact, tools powered by predictive analytics are becoming key to the success of many dealerships’ internal processes and structure.

These tools are powerful for auto dealers because instead of metaphorically tearing out the showroom floor and starting from scratch, predictive modeling builds on the sales and marketing best practices that dealers have been relying on for decades. This benefits auto dealers in numerous ways including: 

Doing More With Less

Predictive analytics can aid dealerships of all sizes in removing costly inefficiencies by automating tedious and manual processes like sifting through a stack of leads. Rather than replacing salespeople, these tools empower teams to work more efficiently and effectively by leveraging data to sell more cars every month.

By analyzing the insights stored inside a dealership’s CRM, DMS and sales platform, as well as high-quality, third-party data, these tools can automatically personalize and target marketing messages, tailoring each to its individual recipient based on the channel, timing, messaging, offer and more predicted to maximize their engagement. 

This sort of personalized outreach at-scale simply wouldn’t be impossible without these advanced marketing tools. Taking a similar approach with Mastermind, our dealer partners report a lowered cost-per-sale by an average 80%.

Simplifying Dealership Processes & Operations

Every dealership has its own way of doing business, and there is no one-size-fits-all approach selling a car. With every dealership – and every customer – being so unique, it’s important to simplify and unify your processes and operations wherever possible.

For example, by utilizing behavior prediction technology and ensuring the CRM and DMS data can be easily accessed and used to fuel processes like acquisition and inventory strategies, dealers can reduce their dependence on third party lead providers.


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How to Maximize the Impact of Your Dealerships Tools & Ditch Third-Party Leads


Building a Stronger Team

Ensuring every department is working from the same information is key to dealership success.

By unifying their insights – and subsequently their approach – dealers can leverage predictive analytics to better connect and build stronger dealership teams.

Whatever the staff looks like – however large or small – putting data at the forefront of a dealership’s sales and marketing strategy means dealerships can easily connect the dots between departments to improve the customer experience. For instance, many dealerships have connected their service and sales operations through their BDC and are leveraging behavior prediction technology to fuel their service-to-sales efforts.

To navigate challenges in today’s continuously evolving automotive industry, dealers need to ensure they can reliably predict what will happen next. From identifying and engaging drivers of in-demand pre-owned models to fuel acquisitions, to equipping their sales and service teams to meet the demands of your customers, predictive analytics empower dealerships of all sizes to stay a step ahead and secure future success.

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