There is a growing movement that is trying to convince consumers that they are sitting on a veritable goldmine by doing nothing more than going online.
I’ve come across a pair of articles in the past week or two that spotlight the trend of start-up companies looking to help consumers monetize their personal data.
Who knew that viewing funny pictures of cats could be the yellow brick road to retirement?
For auto lenders, this is an interesting development on a couple of different levels.
Firstly, how can lenders capitalize on this trend? How can they target potential car-buyers and let them know about a specific offer before other lenders get to them?
A recent report released about online advertising highlighted that companies are not doing enough to target specific consumers with specific offers. A consultant working with the World Economic Forum studying the economics of personal data thinks that a killer app will be released within the next 12 months that helps companies increase their targeting of consumers by harnessing the massive amount of personal data that exists online.
Think about how powerful it would be if you knew that a consumer had posted on Facebook asking friends about where they have their car loans, and if they had visited a site that has auto loan calculators, and had agreed to receive auto loan offers via email. How much would you pay for that kind of lead?
A recently released report from KPMG said that more than 60% of consumers are willing to have their actions online tracked by companies, as long as they receive some value from the partnership.
Above and beyond the lead-generating opportunities that exist by targeting consumers’ personal data, there is the larger concern of privacy. When it comes to consumers’ financial information, privacy is paramount. How much of an individual’s information will be available and what will lenders be able to see and control?
Data is what is going to drive the next boom cycle for auto lenders. Those who succeed, especially in the direct market, will be those who can wade through the morass of data to identify potential leads before anyone else can.
There is a growing movement that is trying to convince consumers that they are sitting on a veritable goldmine by doing nothing more than going online.
I’ve come across a pair of articles in the past week or two that spotlight the trend of start-up companies looking to help consumers monetize their personal data.
Who knew that viewing funny pictures of cats could be the yellow brick road to retirement?
For auto lenders, this is an interesting development on a couple of different levels.
Firstly, how can lenders capitalize on this trend? How can they target potential car-buyers and let them know about a specific offer before other lenders get to them?
A recent report released about online advertising highlighted that companies are not doing enough to target specific consumers with specific offers. A consultant working with the World Economic Forum studying the economics of personal data thinks that a killer app will be released within the next 12 months that helps companies increase their targeting of consumers by harnessing the massive amount of personal data that exists online.
Think about how powerful it would be if you knew that a consumer had posted on Facebook asking friends about where they have their car loans, and if they had visited a site that has auto loan calculators, and had agreed to receive auto loan offers via email. How much would you pay for that kind of lead?
A recently released report from KPMG said that more than 60% of consumers are willing to have their actions online tracked by companies, as long as they receive some value from the partnership.
Above and beyond the lead-generating opportunities that exist by targeting consumers’ personal data, there is the larger concern of privacy. When it comes to consumers’ financial information, privacy is paramount. How much of an individual’s information will be available and what will lenders be able to see and control?
Data is what is going to drive the next boom cycle for auto lenders. Those who succeed, especially in the direct market, will be those who can wade through the morass of data to identify potential leads before anyone else can.
I still can’t believe Judge Gonzales allowed the Section 363 sale so I am struck dumb on this whole subject.
Mike, you are spot on with this one. It’s all about the data.
But the “killer app” you write of is out there. It is called the financial institution. The typical financial institution today has mountains of data that provide a unique window into the spending and fiscal behaviors of consumers.
This has led me to question whether “banking” is nothing more than “commerce”? Whether “banks” are nothing more than elements of retail?
I am of the opinion that financial institutions cannot view themselves as simply “enterprises of finance.” Rather, the better definition of a bank is “a repository of financial data.” Once lenders come to terms with that — and larger lenders have — they can begin to consider ways to leverage that data not just for their benefit, but for the benefit of their commercial clients, in auto financiers’ case, dealers. That’s where the explosion of value will come from for auto finance companies.
Let’s think of a particular scenario. Soon, near-field communication (NFC) will allow consumers to walk into a store and for that store to immediately know who that person is. That data will be tied to the consumer’s financial identity. With the NFC “ping,” when the consumer walks into a dealership, a whole different shopping and financing experience can take place. That consumer’s ID is now painted with the lender’s underwriting criteria, allowing the dealership to sell with more intelligence — and the consumer to get a better deal, both for the car and for the financing. Will the lender have to tie in to the entirety of the consumer’s banking life? I think so, and in this way, I think banks have an advantage, because generally speaking they “financially touch” consumers more than captives. (I suppose captives will be able to acquire this data to refine their offers, but as you pointed out, Mike, that data will come at a high price.)
What this all boils down to is auto finance by data.
JJ
Excellent 2-fer.
1) Comment on a good post
2) Hype the conference!
Well done!
I try, Frank.
The scenario Mike describes is what we’re actually doing to some extent with our DriveItNow service. We are interested in having confidential discussions on this topic with interested lenders.