Big Data, Better Decisions: How does business intelligence drive change in the Chinese automotive market?
Tiger Lee Weihan
This paper shows the process that of generating an auto customer repurchase model, based on data warehousing after data integration. The model offers a new solution for the marketers to attract more customer loyalty in the booming after-sales market.
China has become the world's largest automotive market in the last four years, but only in the sales market. For most OEMS and dealers, new vehicle sales means a better market share and great revenue, while after-sales means the main source of their profit. After a short investigation in the financial reports from some listed automotive OEMs and dealer groups, we found that the after-sales profit margin is five to ten times higher than the sales profit margin. Customer loyalty gradually becomes the key to 'profit and loss', and a challenge that most marketers have to face is to avoid customer churn (mainly repurchase/spare parts /repair and maintenance churn). OEMs are more concerned about repurchase churn than spare parts/ repair and maintenance churn, but vice versa in the dealer's end. A repurchase model has been built to identify the possibility of customer repurchase behavior, and embedded into a business intelligence system to generate hot repurchase leads, then peer to peer marketing (offer) will be executed by OEM marketers or dealers for more revenue. For Chinese OEMs, it is a right way to manage their customers and find a win-win strategy in the customer life cycle. CRM (new concept/new technology/new methodology) is emerging in Chinese automotive market, but there is a long way to travel.