Hi, I'm Jessica Rudnicki with Reynolds and Reynolds.
Welcome back to Connected.
Today I'm talking to Haley Holmes,
product planning manager at Reynolds and Reynolds,
about data and equity mining and how dealers
can use these strategies to sell more vehicles.
Let's get connected.
Hi, Haley. Thanks so much for being here today.
-Hi, Jess. Thanks for having me.
We are glad to have you and I'm looking
forward to today's conversation because
you're here to talk about
data mining versus equity mining.
And I'm hoping you can walk me through,
and the viewers, through the differences
in the two disciplines and how each
practice can help dealerships
sell cars, right? That's what
they're in business to do.
So, Haley, can you start by laying out the
basic definitions and uses of each type of mining?
Sure. So let's start with equity mining.
Oftentimes, equity mining is looking at
your current customer database
and evaluating how much equity a
customer currently has in their vehicle.
That means you could be looking at how--
where they are at the life of their loan
and comparing it to how much the vehicle
is currently worth.
A lot of times this is used to determine
which customers may be looking to
upgrade into a new vehicle.
On the flip side with data mining,
you're going to still be starting with your
customer database,
but then we're going to be looking at
additional data besides just the equity position.
You're still going to be looking at
maybe who's ready to buy
or even based on different life
circumstances that might make somebody
in the market to buy.
You're able to do this with database
mining by adding demographic data,
behavioral data, and also
transactional data.
OK, that's good to know. I had kind
of an idea of what
equity mining was, but it's good to know
that with data mining, like you mentioned,
behavioral, transactional data is all
included in that.
So thank you for explaining that. I feel
like I have a little bit of a better
grasp on the two now.
And in terms of using the information
that's collected, whether that be through
data mining or equity mining, is there
anything that dealers should
be focusing on or
any common errors that you see? How can
dealers best use these strategies to sell cars?
Well first, with the equity mining piece,
oftentimes dealerships are
using equity mining to
only find customers that are in a
positive equity position.
This can be a big miss because
oftentimes customers with negative
equity might be just as 
likely to purchase a
vehicle as somebody with positive equity.
There might still be something going on
in their life where they need to upgrade
into a new car.
On the database mining piece, we want to
make sure that you go
in depth and you have a broad amount of
different data
to really get an idea of what those
customers are doing,
who is likely to upgrade, and really what
are they likely to upgrade into.
You want to establish an overall
strategy so that way you're able to
recognize different trends in the market
and what the customer is likely to do next.
Yeah, that makes sense.
So Haley, if I'm a dealer,
Should I be looking into data mining
or equity mining?
Which do you think is going to
help me sell more vehicles?
Really, what I would think is it's going
to be the combination of the two.
You're going to use the equity mining
piece to really get an idea of where the
customer currently is in the life of their loan,
what type of financial situation
they're currently in,
which is going to help you then upgrade
into a new vehicle
and be able to structure that new deal.
But to really
identify which customers are best,
we really should be using
the data mining piece
to really get an idea of, you know,
what's going on in their life,
what are they likely to upgrade into.
Maybe they just want to trade in the
vehicle to get it off their hands.
Maybe they need a new newer model
because they
just want the newest tech.
Or maybe they need a new model--
a different model all together because
of a life circumstance.
We see this often, you know,
someone maybe has a sedan
and further down the line, they see they
need something that's a little bigger,
has more space. So an SUV might be a
better fit.
Regardless of what the customer's needs
are or their wants,
really to be able to analyze all this
data and all the demographic,
behavioral, and
transactional data
that plays in with that equity position,
you really need some type of robust
predictive analytics engine
to take in all this information.
Yeah, it's a lot of data. And that's
definitely something for dealers
to keep in mind.
Thank you, Haley, for educating on us on that.
Is there anything else that you
would like to share with the audience
today while we have them?
Yeah. So really, you know,
why is it important?
Why does this matter right now?
Equity and data mining
And really, it's going to be most
important when you're looking at
allocating the right inventory to your
current customer database
and your customer base overall.
This can also mean
targeting certain customers that have a
vehicle that will be a desirable
preowned unit for your
preowned inventory.
That often means that it's maybe a more
recent model year with less mileage
and a lot of times we see that those
customers actually are in a negative
equity position.
So that's why it's important to use both
the equity and the data mining together
as one to get a good idea of what
inventory is best for you and your
customer database.
Take a look at your mining efforts,
though, and really determine which
category you're going to fall under.
Are you maybe only using the equity piece
or the data piece?
And determine where you might be missing out
and where you could improve.
Yeah Very insightful.
Well, Haley,
it's been a pleasure.
Thanks again for being here today.
Thanks for having me.
Thanks again to Haley for joining us today.
We hope you were able to get a few
takeaways from the conversation.
Before we hop off just a quick reminder,
you can watch or listen to past and
future podcast episodes on YouTube,
or Apple and Spotify podcasts by
searching for the Connected podcast.
Subscribe on these channels to get notified every
Wednesday when new episodes are released.
Thanks for joining us.
We'll see you next week!
