The Boy Scout motto “Be Prepared” is easier said than done, but gets even thornier when considering what you’re preparing for. It’s one thing to anticipate a pre-determined event at an expected time and place, and another thing entirely to prepare for the unexpected, which may or may not happen on a given day, or at all, at variable scope.
This notion of expecting the unexpected is especially pressing for dealerships, which face a great number of unknowns. Much like starting an insurance plan or fixing a leak in the roof, it may seem like it’s never quite the “right time” to make these precautionary investments — until a hurricane hits.
So, how can dealers prepare for “hurricanes” of their own, and what might some look like? Beyond a dedicated, flexible and communicative team, a robust management of your customer information is crucial in navigating those unforeseen bumps in the road. Below, we’ll discuss how streamlined Customer Data Management can help dealers react to, anticipate and even capitalize upon unexpected events such as maintenance services, recalls and regulatory compliance.
What is Customer Data Management?
Let’s start with a definition: Customer Data Management (CDM) is the collection and maintenance of customer information — from contact info to purchase history, demographics, and touchpoints — in one centralized system for easy access and analysis across an organization.
The alternative to CDM is fragmentation: Whether in filing cabinets, Excel spreadsheets, local machines, disconnected servers or even separate departments, customer data is broken up in pieces. This creates difficulty in cobbling together, say, first-time customers under 35 in Ohio since last year. Good CDM could instead turn the process into a quick and clean download.
With this definition in mind, let’s look at three applications of how robust CDM can help dealers through the unexpected.
Maintenance covers perhaps the most common “unknown” at dealerships. Due to uncontrollable variables like weather, bad drivers or faulty components, your service department might have two maintenance repairs in a day or 10. How could CDM help here?
The most obvious benefit is time. Quickly pulling customer and vehicle information on high-volume days relieves administrative burden so the service team can focus on repairs. Alerts on a part’s purchase date and service history can further help by automatically identifying potential replacements, leading to cross- and up-sell opportunities that may have otherwise been missed.
A less obvious benefit is anticipating service needs from aggregate maintenance trends. If a part typically needs service within a predictable time range after vehicle purchase, stock up on the part based on how many customers will fall in that range next quarter. Additionally, send those customers targeted emails reminding them of your services to get more repairs through the door.
If general maintenance is unpredictable, recalls might be the “Great Unknowns.” You suddenly have tons of customers at once, potentially overloading your service department.
Administrative benefits apply here to the extreme: Quick access to information will help move those lines along. Remember, though — beyond schlepping folks in and out, as NPR has reported, a recall is still a customer touchpoint and therefore a revenue-generating opportunity. Having customer purchase histories, complete with parts and service alerts, at the ready is certainly advantageous.
Additionally, recalls are ripe for nurturing customer relationships — good customer service really shines during trying times. A CDM system could automatically send targeted follow-up emails to customers asking how the recall went. You could also consider flagging customers with particularly difficult experiences, and having your team follow up by phone.
Some unknowns come from outside your operations entirely, such as regulatory investigations that can hit an organization all at once.
A prime example is an IRS audit. Though financial and accounting software is certainly helpful here, don’t count CDM out: It can’t hurt to have all your customers, along with every vehicle, part, repair and serial number, ready to go. That way, you can kindly tell the government, no pets or deceased persons making purchases here.
Another example is anti-discrimination regulation. Auto dealerships that engage in financing must abide by the Equal Credit Opportunity Act (ECOA), which prohibits lending discrimination based on race, religion, sex and other characteristics. ECOA compliance is an increasingly pressing issue: As NBC has reported, a recent National Fair Housing Alliance report found evidence of racial discrimination in financing at eight franchised dealerships in Virginia in 2016-’17. Additionally, just this September, the U.S. Justice Department filed a lawsuit alleging discriminatory lending against African Americans at a used car dealership in Maryland.
Dealership management can wholeheartedly prohibit discrimination, but the devil is in the data. You could ensure compliance by capturing demographic information — via an opt-in form post-sale — and comparing prices, financing options and interest rates by customer group. At worst, the numbers are alarming and lead to internal reforms; at best, the data gives a strategic view of your customer spread to help identify marketing opportunities as compared to your state or MSA.
A Smooth Ride Ahead
In all, it’s tough to predict every bump and pothole in the road toward dealership success, but a good suspension system certainly helps. From saving time to identifying sales opportunities, prepping for repairs around the corner and ensuring regulatory compliance, a dynamic Customer Data Management system is imperative for dealers seeking a smooth ride.