Tractor Zoom recently had the opportunity to exhibit at John Deere’s user group meeting in Las Vegas. Data, and how it is used within dealerships, was a feature topic. As exhibitors, we were able to lead a class on helping dealerships become more data-driven in their decision making. On stage was our VP of Product Development, TJ Masker, who was joined by Brian Knotts, COO of Koenig Equipment, in sharing their experiences helping dealerships shift their traditional decision-making processes with a more data-first approach. The following post is a summary of that class.
It should be no secret that basing your decisions on factual information produces better results. Logic implies that if your entire organization makes decisions based on solid data, then even more positive results abound. Benefits to this way of decision-making include:
- More accurate forecast predictions
- Higher levels of efficiency, which lead to cost savings
- Improved ability to adjust to market conditions and therefore scale your business
If it was easy though, we’d all be doing it. Some of the most common challenges include:
- Low-quality data
- Inadequate actionable insights
- Lack of a data-driven culture
- Limited understanding of what is useful, quality data
- Unstructured data
- Undefined data analytics strategy
These roadblocks can be condensed into three main actionable challenges: Culture, Time Horizon, and Data Quality.
Culture, according to the NewVantage Executive Survey, is the biggest impediment around data initiatives for the fifth straight year. According to Knotts, an essential ingredient for a data-driven culture is formal adoption by the C-suite leaders. It must be a regular focus of meetings, communication, and the way they operate. From there, kick-off meetings, signage, and all forms of communication need to reinforce what you are promoting. Koenig also focuses on five key metrics that drive their business. Knotts emphasized the importance of “Five, or fewer, KPIs. This way employees can easily identify those drivers that then enable them to make impactful decisions without losing sight of the main goals.”
“At Tractor Zoom, we’ve seen organizations adopt a more data-driven approach as the user experience becomes less complex and more compatible with their existing day-to-day process” stated Masker. “We have seen this manifest through the evolution of our valuation platform Iron Comps. As we modified our platform to reduce redundant steps for users or when we recently integrated into a 3rd party CRM system, our user engagement and usage metrics skyrocketed!”
#2: Time Horizon
Organizations looking to adopt a stronger data-driven culture can benefit greatly from a short-term win, but also necessitate a long-term commitment in order to make lasting change. Having a short-term, ideally ROI-driven project, which you can more easily execute and celebrate the win is likely to build the momentum and support needed to get other stakeholders on board. Masker provided the example of Atlantic Tractor partnering with Tractor Zoom to improve their inventory repricing strategy. In six short months, their growing dealership was able to improve used margins and reduce their risk of aged equipment. All of this without needing to add additional headcount. Significant wins like this have helped convince others within Atlantic Tractor of the power of data-driven decision-making.
Knotts added that hiring a non-revenue generating person is a strong commitment to long-term results, but it also can help aid in short-term gains. Koenig has added a data analyst to their staff. While the returns from this person should not be expected in year one, they have already started to make a positive impact across the organization.
#3: Data Quality
Garbage In. Garbage Out. It is almost cliche by now, but none-the-less truthful. With so much data being collected today, many organizations, dealerships included, can quickly be overwhelmed. Here, both Knotts and Masker mentioned the importance of good, trusted partnerships to help you collect, clean, organize and make the most of your information. Brian went on to elaborate that the partner should not just be transactional, but rather have a clear path for continuous improvement. Both theirs and yours.
Masker states that there is nothing more important than quality at Tractor Zoom. “That is why we have built three layers of protection to help ensure data quality. The first is the direct partnership with auctioneers and dealers to help ensure good data is received. Second, we have a quality assurance team in-house who is responsible for reviewing and ingesting all new data daily. Finally, through data science we have built an outlier detection model to identify lots with values outside of expected parameters.” Having both automated systems and personal oversight are crucial to protect your data quality.
An insight from an audience member added that “In relative costs it takes $1 to ensure incoming data is clean. $10 to clean data once it is already in your system, and $100 to ignore it and do nothing about the bad data.”
Knotts ended the class with uplifting insight. “With the right kind of quality data, along with a culture and plan to base decisions on that data, dealerships will be able to thrive, not just survive, during the industry troughs.”
Article Written By Tractor Zoom