Don't Let the Modern Gold Rush Take Down Your Business - AutoSuccessOnline
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Don’t Let the Modern Gold Rush Take Down Your Business


David Nathanson is an industry veteran of over 40 years. He was president of a large multi-franchise, multi-location dealership group in the Midwest, former managing director of the PricewaterhouseCoopers Automotive Retail & Distribution Practice and one of the founding partners of motormindz ( based in Troy, MI. He is an industry advisory board member for AutoAp, Inc.


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Historians credit Sutter’s Mill, near present-day Sacramento, as the epicenter of the 1849 California Gold Rush. The mill’s owner, a German immigrant named John Sutter, owned 50,000 acres in the area when one of his employees discovered gold in the river near the mill.

Though Sutter tried to keep the gold a secret, word spread quickly. Soon, his land was overrun with squatters and his plan to build a thriving city was thwarted. Despite sitting on top of all that gold, Sutter’s city never materialized, his land was ruined and he lived out his life on a $250 government pension.

Automotive retailers need to learn from Sutter’s experience. Today, automotive retailers are sitting on their own goldmine — what we like to call the “Dealership Data Goldmine.” Customer data is a coveted asset in the industry and holds the key to future marketing success for vehicle sales, service appointments and long-term customer relationships. Much like the California Gold Rush, everyone wants to get rich from this data. And, much like Sutter, automotive retailers need to protect this valuable asset and make sure anyone with access to it is a trusted partner.


A $2 Billion Dollar Opportunity

The dollar value of the Dealership Data Goldmine in the United States is expected to reach $2 billion annually in the next few years. That’s more than $100,000 per franchised dealer annually. The world continues to move toward digital marketing, which creates more rich customer profiles with nearly every transaction. Savvy marketing and technology companies are constantly finding new and innovative ways to turn this data stream into revenue generating opportunities.

Today’s automotive retailers have invested heavily in generating prospects, closing sales and maintaining long-term relationships. Unlike Sutter, they didn’t stumble upon a rich vein of gold. Instead, they worked tirelessly to build their own gold mine of customer history.


But, make no mistake. Much like squatters running for Sutter’s land, many companies want to mine and exploit the dealer’s data. Automotive retailers need look no further than their own DMS providers for an example.

Certification programs on the surface look to be a noble effort at providing data security. But, at what cost? DMS providers are essentially putting a dealers data behind lock and key, then charging exorbitant fees for access. Dealers need to ask themselves a critical question:

“What do I really get out of certification?”

The answer? Higher prices from vendors who are passing along certification costs. What do the DMS providers get? A new revenue stream that looks impressive to Wall Street, but provides no tangible asset to the dealership.


What Could Sutter Have Done Differently?

Sutter probably could have retired a wealthy, happy man. Instead, his assets were plundered by people he didn’t even know. What could he have done differently and what can dealers learn from his example?
First, Sutter needed to protect his assets. He could have started by finding trustworthy partners to help him guard his land.

Second, it would have helped to have realized the potential in mining the gold himself. A mining operation would have provided more capital that ultimately would have led him to create the city he envisioned.
How does this correlate to dealers? Find a trusted partner to protect your data gold mine. Make sure that partner has your best interests at heart, rather than building profits to impress Wall Street.

And, finally, recognize that your data truly is a gold mine. Learning how to harness its power ultimately will help you build a strong, profitable dealership.

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