Data Security: a Priority in Today’s Automotive Retail Market

Why Data Security Must Be a Priority in Today’s Automotive Retail Market

Dealers who gain a better understanding of data security and how data relates to industry trends will ultimately find themselves in a better position to achieve long-term goals.


By Aaron Baldwin, chief product officer at automotiveMastermind

In today’s ever-evolving automotive retail environment, data security must be a top priority rather than an afterthought. This matter only grows in importance as dealers collect and store a growing amount of sensitive personal information for thousands of customers through their sales and marketing efforts.

To comply with various rules and regulations, safeguard reputations and avoid potential financial losses, dealerships must leverage security systems and proper staff training. By prioritizing security, the data collected from customers can then be used to help dealerships navigate ongoing industry challenges.

Whether it’s ensuring data is secure or working with a trusted data partner, dealers who gain a better understanding of these factors and how data relates to industry trends will ultimately find themselves in a better position to achieve long-term goals.

Dealership Data and Its Uses

With various security risks at hand, dealers need to understand what they’re working with before fully leveraging their data — mainly that not all data is the same and certain kinds don’t offer the same usage or value. 

First-party data owned by dealerships and stored in their customer relationship management (CRM), document management system (DMS) and other platforms is the backbone of a data-driven marketing campaign and includes insights like purchase and maintenance history and online customer interactions. While data sourced from standalone equity mining platforms have value, this alone won’t lead to success.

Instead, first-party data can be enhanced and integrated with other resources to unlock deeper insights into customers’ purchasing decisions. This data paints a broader and clearer picture of all available opportunities while enabling proactive decision-making around personalized customer interactions.

Dealers can use both data sets to integrate a data-driven approach into their personalized marketing effort — which involves using their findings to craft communications tailored to an individual customer’s unique traits and purchasing preferences. This strategy is meant to defend against competitors’ conquest attempts by personalizing every communication touchpoint with buyers, including sales and F&I offers, service updates and ongoing loyalty communications. 

Data Security in Practice 

One method to ensure the data dealers handle is secure is by collaborating with third-party data and technology providers who are committed and adhering to strict security standards.

There are a few layers of data security, ranging from the basics (data being hosted in a multi-cloud environment and multi-factor authentication) to implementing a more rigorous information security process by obtaining certifications like SOC 2 Type II and ISO 27001.

In my opinion, working with a technology partner that goes beyond the “standard” data security basics is non-negotiable.   

Dealers must also ensure each member of their team is properly trained and informed about the risks of a data breach. This includes providing relevant materials about cyber-attacks, phishing scams and the consequences that come from improperly handling sensitive materials to each member of every dealership department. 

Rather than finding themselves the latest victim of a data security breach and their reputation in shambles, dealers need to prioritize security measures from day one and ensure their technology partners adhere to those same standards. Doing so not only preserves a dealership’s good-standing reputation but also allows them to take full advantage of the marketing opportunities that come from utilizing customer data in a safe and efficient way.

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