In the past year, dealerships around the country have experienced dramatic highs and lows ranging from historically high sales and profits to historically low daily supplies of new vehicles due to the chip shortage. Now looking ahead to 2022, further uncertainties are starting to emerge.
According to reports from IHS Markit, due to new and ongoing production disruptions, including recent lockdowns abroad, the chip supply may only now stabilize in the second quarter of next year with recovery efforts starting in the second half of 2022.
To stay ahead of disruption and achieve sustainable success in the year ahead, proactive dealers are turning to data-driven marketing tools to analyze their audience and identify future opportunities.
But not all data is created equal. Industry research finds poor data quality costs organizations an average of $12.9 million each year.
In this blog post, we share three things critical for dealers to know to do data-driven marketing with success in 2022, including:
- Understanding your dealership’s data
- Maintaining high-quality data
- Protecting against potential loss
Understand Your Dealership’s Data
The first step to success in modern data-driven marketing is understanding where your data is coming from.
The backbone of most data-driven marketing campaigns is first-party data. First-party data is the information you collect on your customers, ranging from their purchase and maintenance history to their clicks and actions on your website. This is the data that you own, housed in your CRM, DMS and other dealership platforms.
In today’s hyper-competitive and rapidly evolving world of automotive retail, dealers can’t afford to rely solely on first-party data, such as using standalone equity mining platforms. To accurately identify customers earlier in their buying journey or to avoid nurturing a lead who only seems like a prime prospect on the surface, dealers need to look deeper at the factors driving a prospect’s purchasing decisions using third-party data.
By leveraging comprehensive data mining technology powered by insights from reputable data providers like IHS Markit or CARFAX, dealers can enrich their existing datasets with additional details like household demographics, financial information and more, painting a clearer picture of their available opportunities.
Maintain Data Quality
Whether it’s first-party or third-party data, maintaining high-quality data is key to the success of your dealership’s marketing efforts.
When it comes to first-party data, maintaining best practices with data collection and maintenance is critical. Even a simple, manual mistake like entering a customer’s name in all capital letters (or worse, misspelled) not only makes your dealership look bad, but it could also mean the difference between a sale or conquest for your competitors.
A key element to protecting your hard work is developing, implementing and maintaining internal processes to promote best practices for data collection. While these processes will differ at each dealership, look for opportunities to automate as much data collection as possible to reduce human error. Even simple steps like scanning drivers’ licenses rather than typing them or asking the customer to enter their contact information into a tablet while they wait will help promote data accuracy and quality.
Data quality is essential when it comes to third-party providers, as well, especially with third-party leads and in the wake of new data privacy laws. When working with third-party data providers and technology vendors, look for partners who commit to data privacy and maintain strict security standards.
Protect Your Dealership from Loss
When handling dealership customer data, it’s just as critical dealers implement good internal practices to protect your business from potential loss. This is especially important as dealers increasingly look to new digital tools to keep up with evolving consumer demand – and the prevalence of cybercrimes are on the rise.
This knowledge should extend to your team, including any employees who use dealership tools that leverage customer data. This means implementing security measures that go above and beyond asking your team not to email sensitive customer data back and forth. Ensure employees who access customer data are trained on the latest privacy laws and always maintain strict security protocols when using dealership technology.
Finally, plan ahead. While this may seem grim, thinking ahead to “worse case scenarios” empowers your team to proactively prepare and protect against potential loss by putting processes in place ahead of time. For example, in the case of employee termination, standard practices like restricting access to email and CRMs should be enacted to keep your data, customers and dealership safe.
In today’s increasingly competitive and complex automotive retail market, dealers turn to data-driven marketing to stay a step ahead. However, simply “having” the data isn’t enough. To successfully deploy data-driven marketing in 2022, dealers need to understand their insights, maintain a high-quality database and protect their dealership from future loss.