The effective utilization of data is essential for driving successful automotive marketing strategies and fostering strong customer engagement. However, many dealerships encounter a significant challenge: their marketing campaigns often fall short due to disorganized and incomplete customer data.

Traditional Dealer Management Systems (DMS) and Customer Relationship Management (CRM) systems, while vital, are not inherently designed as marketing systems. They lack the necessary functionalities for easy list generation and segmentation, and are not equipped to share, understand or react in real-time to information. This limitation is especially evident when dealing with records that include customer interactions and behaviors, which are crucial for integrating with a marketing system. This gap in capability is where Customer Data Platforms (CDP) become crucial.

Real-time, genuine communication, which is essential for executing personalized messaging based on the system’s knowledge or customer activities in various marketing channels like email, SMS or digital, becomes challenging. This issue is compounded by the fact that vendors marketing on behalf of the dealership do not control the data, making the process unpredictable and often ineffective.

To address these challenges, it’s important to understand the common data management issues faced by dealerships. These issues are broadly categorized into three buckets: duplicate records (and closely related household records), malformed records, and invalid email addresses or spam trap addresses.

Duplicate records are ubiquitous across industries. In B2B marketing, the goal is to keep duplicates below 1% of the database. However, many dealerships have duplicate rates in double digits, sometimes as high as 40-50%. One significant cause of duplicate records is service scheduler forms, where customers often provide minimal or varied information, leading to multiple DMS entries for a single individual. While these forms are necessary, their design can inadvertently contribute to data duplication.

Malformed records, closely related to duplicates, consist of data that is incorrect or incomplete. For example, varying address formats for the same location can cause significant discrepancies. Such malformed data, when pulled into marketing campaigns, can lead to misdirected or ineffective marketing efforts.

Invalid email addresses and spam traps are another significant issue. These can arise from simple mistakes, such as typos in email addresses, or more systemic issues like bypassing data entry protocols. For instance, a long-inactive email address can be considered invalid. Analysis of 8 million customer records across several dealerships revealed over a quarter million invalid email addresses, of which 40,000 were spam traps.

These data quality issues not only lead to poor customer experiences but also compromise the integrity of marketing reporting. The principle of “garbage in, garbage out” is particularly applicable here — flawed input data inevitably results in flawed output, impacting customer relationships and the dealership’s reputation.

The solution lies in implementing a robust CDP, which enables dealerships to manage and utilize their customer data effectively. A CDP integrates various data sources and automates data management processes. It helps in creating a unified customer profile by resolving identity issues and streamlining data for marketing use. This improved data management leads to more effective and targeted marketing campaigns, ensuring better customer engagement and business success.

The evolving regulatory landscape regarding customer data privacy, coupled with the impending shift to a cookieless world, underscores the need for a sophisticated data management platform like a CDP. It ensures compliance and adaptability in a changing environment while enhancing marketing effectiveness. The CDP market has seen substantial growth, with significant investments indicating the increasing recognition of its value in data-driven marketing.

The utilization of a CDP in automotive retail is part of a larger trend toward data-centric marketing across various industries. It offers dealerships the opportunity to significantly improve their marketing ROI, customer engagement and overall business performance in a competitive market. Dealerships that adopt and effectively utilize CDP technology are better positioned to overcome data challenges and capitalize on the opportunities presented in the digital marketing landscape.