In part one of this series, I discussed the importance of dealerships using their data effectively in marketing and how, when done properly, it can increase vehicle and service sales while improving customer loyalty. Now I’d like to discuss why a great majority of dealers aren’t already using their data to its full potential. I can’t think of another business today that is as antiquated as we are in the automotive business when it comes to truly understanding our customers purchase habits and buying preferences. That’s primarily because we don’t take the time and make the effort to understand them, even though we have the data right at our fingertips.
The principal reason that many dealers aren’t using their data correctly is a lack of understanding about exactly what data they have, how to access it, and how to segregate it into valuable subsets of customers. Most dealers realize and understand that data mining can be an important asset and do use it in some very broad, general ways. It is most frequently used for following up with orphan owners and customers coming off-lease. While this is certainly a start, there are surely many more practical and effective ways to use the data. The underlining issue always seems to be a lack dealership knowledge as to how to get the data, segment it and then market it properly to the correct audience.
The big DMS providers like Reynolds and ADP certainly don’t make this process easy for dealers. In-fact they have implemented changes that actually make it harder for a dealer to effectively use their own customer data, especially if the dealer chooses to enlist the help of a third party marketer. There have been numerous public conflicts between dealers and their DMS providers regarding who actually owns the dealerships customer and transaction data, and just as importantly, who should have access to it. Despite the hurdles you might encounter with your DMS provider, it is well worth the effort to familiarize yourself with the process for extracting and marketing to these very valuable customers. If you don’t currently have an ongoing business practice in place for this you should add it to the top of your to-do-list.
Getting the data is one thing. But another challenge is that your data is only as good as the information that was put into the system by your employees. If customer data isn’t collected with diligence and accuracy every time a customer visits your store, you are missing a significant opportunity to learn more about that customers contact information and buying preferences. Do you have a process in place that every service writer asks the customer if their email or mailing address has changed? A recent survey of over 100 individual service departments indicated that only 6% routinely asked for updated customer contact information. The most recent US Census indicated that approximately 36 million Americans changed physical addresses last year. At a 6% update rate, dealers missed out on 34 million new customer contact points, just last year alone. Add in the number of email address and phone number changes and the total number of outdated customer contact records in dealers systems is staggering.
Compounding these issues, many dealerships don’t police how data is entered into their system and end up with multiple entries for the same customer. Not only does this make it more difficult to accurately track the customer’s transactional history, it also does a disservice to the customer, as the dealer will thus be frustrated in the effort to provide accurate detailed service records or tie the purchase of the vehicle to its entire service history.
There are many points along the way in which a customer can be duplicated. They can be entered multiple times in the CRM during the sales process. For example, if handled by multiple salespeople, or if the original record was in one person’s name, but the actual sale happened in another person’s. They could be entered as different customers if the husband brings a vehicle in for service on one occasion, and the wife brings the vehicle in a separate time. It’s even possible that a customer makes a purchase within the parts department and is then entered another time. Many dealerships work with CRM companies that create a database on top of the DMS that serves to further increase duplication.
Dealerships should have a strong business policy in place regarding their data and implement best practices for the collection of good, clean data, including full information on every customer contained in a single record. It would be wise to verify with each customer at every touch point that the information contained in their system is accurate, complete and current. Mandate that each customer has a single customer ID and that every transaction is recorded within that ID. Invest the time into cleaning up your CRM and DMS, with the ultimate goal of having identical databases with the cleanest data possible. This is an ongoing process that should be policed consistently. Unfortunately, many dealerships don’t have anyone tasked with marketing that has the right skill set to effectively accomplish this.
In my next blog, part three of this series, I will talk about how to get your data then clean it up so that it can be used effectively in target marketing.