Best PracticesDealership Operations & Processes

How Weather Impacts Your Dealer’s Sales Traffic

As an auto dealer, you are always looking for any information that may have a direct impact on the success of your store. In the first Driven Data Science blog, we looked at the impact of weather and day of the week has on the service department. Now we are going to take those same inputs and apply them to how it affects new dealership leads. The weather data is provided by Wunder Ground and the lead records are extracted from the CRM of two Driven Data clients. We limited the time range of this research to the years of 2015 and 2016. We used more than 400,000 leads records from the Chicago, IL and Charlotte, NC areas to build our analysis. Since dealer stores of different scales have different amounts of new leads per day, we have normalized the lead data by following two steps:

  1. Remove the outliers of raw data and exclude data of Sunday when dealerships are usually closed. List out the number of total leads, the number of Internet leads and the number of showroom leads of each day in 2015 and 2016.
  2. Calculate z-scores for those stores that have normally distributed lead data (almost all of them)

After normalization, the value of lead data actually becomes a statistic which describes the level of new leads on a given day. 0 = an average level, >0 = a high level and <0 = a low level.

Now the normalization process is complete, we have some interesting findings that we elicited from this research:

The weekday has huge impact on the number of showroom leads, significant impact on total leads and a little impact on Internet leads

Figure 1 below shows how the weekday has a significant impact on the number of total leads. As you can see, Friday and Saturday have the top two highest volume of total leads compared with all other days of the week while Tuesday has the lowest. Logical thinking suggests this makes the perfect sense as Friday and Saturday tend to have the most flexibility when it comes to the customer’s potential free time.

 

Figure 1

Drilling down into the different types of leads, we will begin to see a different story. Figure 2 shows the impact that the weekday has on internet leads. I should say the lack of impact the weekday has. The analysis shows it does not matter which day of the week it is, you are still generating internet traffic and producing leads. This is mainly due to the access people have at all times to your site.

Figure 2

For showroom leads, figure 3 indicates the volume of leads is greater on Fridays and Saturdays. This takes us back to our prior theory of potential customers have more flexibility on those two days to visit the dealership.

Figure 3

We compared the weekday to all other factors for showroom leads and it has two times the affect as the second most important factor. See figure 4 below.

Figure 4

Let’s take a look at the same analysis for internet leads. Figure 5 shows that weekday doesn’t have nearly the impact on internet leads as showroom leads. In fact, the weather is the main driving factor for generating internet leads. This does make sense if you think about how bad weather can impact a person to be online more due to limited outdoor activity.

Figure 5

We have discussed the impact of weekdays on leads, now let’s look more in depth at how weather plays a part in the Chicago and Charlotte areas.

In the tables below, you will see how different types of weather events has a different effect on leads for our regional areas of choice. indicates that the weather event will significantly increase the number of leads. indicates that the weather event will significantly decrease the number of leads. ‘-’ indicates that the weather event will not have significant impact on the number of leads.

Table 1 – Weather Effect on Total Leads

For the Charlotte area, rain does not have a significant impact on the total leads, but if you dive into the different lead categories, you will see a different story. When it comes to internet leads, the volume will increase while the showroom will decrease. Again, indoor vs outdoor activity is impacted by this type of weather event. You will notice that the thunderstorm event results in an identical pattern. A snow event will negatively impact this area. Mainly because this is not a normal event for this area.

When it comes to the Chicago area, we find it interesting that the number for all types of leads increases when it has a rain or thunderstorm event. Figure 6 below shows the rain factor analysis for the Chicago area dealership.

Figure 6

 

 

If you compare this to figure 7, the rain factor analysis for the Charlotte area, you will see that the rain event has a much smaller impact on the Chicago area.

Figure 7

We remove the outliers after splitting the data by different weather factors and redo the statistic test.

Table 4 – Weather Effect on Total Leads

These results indicate that a rain or thunderstorm event will not have a significant impact on the Chicago area dealerships. This could be due to the higher tolerance of a weather event as the Chicago area typically deals with more types of weather events. The Charlotte area does not receive as many of the cold weather events like snow and typically has a warmer climate and more opportunity to potentially get outdoors. The Charlotte area can attribute up to 15% of their rainfall from tropical cyclone events so rain and thunderstorms will have a more significant impact on their showroom leads.

 

Jon leads Driven Data’s vision, strategy, and growth, providing dealerships an analytics platform that serves as a long-term strategic asset. He ha...