Your Data Doesn’t Stink. It’s Trapped

Maximizing Marketing ROI in Automotive Dealerships

In the rapidly evolving landscape of automotive sales, the role of accurate data in driving marketing efforts and achieving solid customer engagement to drive Return on Investment (ROI) cannot be underestimated. Dealerships, however, often find themselves grappling with a significant challenge: their marketing endeavors fall short due to trapped and disorganized customer data. Despite dealerships holding invaluable customer information within their DMSs, CRMs, and marketing vendors, the quality of this data erodes rapidly and is often disconnected or spread across different systems, rendering many marketing initiatives ineffective or erratic. 

The key to unlocking success lies in investing in the foundational elements that manage data utilization within marketing tools and communication channels, namely within an automotive-specific Customer Data Platform (CDP) and Journey Builder. Without addressing this issue, customer engagement and experience will suffer, and the ambiguity surrounding ROI will persist. 

This blog delves into the heart of this problem, shedding light on why data becomes trapped, the resulting consequences, and a transformative solution.

The Conundrum of Trapped Data

Data is trapped within data silos, such as the CRM and the DMS, and other customer engagement solutions, such as chat, telephony, and conversational AI, systems that were never designed to talk to each other. 

These systems are plagued with duplicate customer records and incorrect or malformed contact information. It resembles scattered puzzle pieces that can never be effectively organized in one place. Said another way, the data within each system is complex and flawed, making it difficult to create cohesive, personalized messaging to an individual for building relationships and trust, let alone influence a sale.

DMS systems, for example, contain a wealth of customer and vehicle information, ranging from sales transactions to marketing preferences and specific vehicle details to servicing history. With dealerships managing vast datasets, often totaling tens of thousands of records, the dynamic nature of this information leads to constant changes. 

Simultaneously, dealership data is ensnared behind tools and systems ill-equipped to capture and respond to customer behaviors, actions, and interactions. Unfortunately, without a way to ingest and leverage those interactions, customer data becomes stale over time, resulting in less-than-optimal messaging and, worse, missed or lost opportunities. This hampers the seamless flow of insights that should drive marketing strategies, rendering them ineffective and limiting ROI. 

What Causes Inaccurate Data

Inaccurate data in dealerships can stem from various sources, with duplicate records, malformed entries, and invalid emails standing out as prominent culprits. These data anomalies contribute to a cascade of issues that ultimately compromise the overall customer experience. These causes include:

  1. Duplicate Records: Lead to confusion and redundancy, potentially causing customers to receive conflicting information or offers. Statistics reveal that 15-33% of customer records within the DMS contain at least one duplicate record1.

  2. Malformed Records: Introduce errors and inconsistencies, making it challenging to glean meaningful insights or execute effective outreach campaigns.

  3. Invalid Email Addresses: Hinder communication, resulting in missed opportunities to engage with potential buyers and, worse, puts the sender’s email reputation at risk, threatening the ability to do any meaningful outreach via email.

In the end, these inaccuracies not only tarnish the dealership's reputation but also lead to irrelevant outreach efforts and missed connections with customers, diminishing the dealership's effectiveness and customer satisfaction. 

The Consequences of Inaccurate Data

To put the data challenge into perspective, Forrester states that 25% of marketing campaigns have been negatively impacted by poor data management. 37% wasted spend because of poor data quality and 35% due to inaccurate targeting, resulting in a 30% loss of customers. This alarming figure underscores the magnitude of data quality issues within dealerships. Disparate systems and subpar data collection practices exacerbate the problem, resulting in scenarios where marketing efforts target non-existent or irrelevant customer profiles. Inaccurate data within dealership systems gives rise to a range of issues, each with substantial repercussions:

  1. Poor Customer Experience: Relying on “one size fits all segmentation” hampers communication with customers and creates a perception that the dealership lacks an understanding of their needs. This negative experience can significantly hamper sales outcomes.

  2. Irrelevant Outreach: Customers receiving calls and messages about vehicles they no longer own find the experience frustrating and counterproductive. Such interactions can deter potential sales and erode customer satisfaction.

  3. Missed Connections: Due to outdated or missing customer contact data that limits the dealer’s ability to reach and engage customers.

The Complexity of Unified Data Utilization

The notion of gathering, organizing, unifying, and subsequently executing marketing campaigns using disparate data sets from varied systems might sound promising, yet it's far from simple. 

Acknowledging the pivotal role of accurate data, insist on regular data improvement to rectify these issues. Ongoing data quality checks is a powerful solution, ensuring dealership records remain accurate and actionable. Best-in-class customer record deduplication solutions can be used to create a primary marketing record for an individual to focus marketing on. It’s also possible to quantify and suppress invalid and spam-trap email addresses, minimizing misfires in marketing campaigns. This process involves more than updating when customers buy or sell their vehicles. Incorporating change of address, updated phone numbers, customer marketing preference, and much more can lead to increases in engagement. 

The process can be overwhelming and confusing, deterring dealerships from pursuing this path of improvement. However, a solution lies in adopting the right marketing technology stack, Customer Data Platforms (CDPs), and Journey Builders—tools that empower dealerships to harness actionable data and tools for sales success.

A CDP stands as a potential game-changer for the automotive retail industry. But what exactly is a CDP? How does it work with existing systems and align with the dealership's goals? These are pertinent questions that dealerships need to address to realize the potential benefits of a CDP. 

A CDP, as defined in the broad Business-to-business (B2B) or Business-to-consumer (B2C) world by leading CDP companies such as Treasure Data, Klaviyo, BloomReach, and Salesforce, is a specialized software designed to gather and unify first-party customer data from various sources, creating a unified, comprehensive profile for each customer. These sources encompass digital channels, including behavioral data like website and app interactions, chat records, digital assistant engagement, and metrics on interaction frequency and duration. Additionally, CDPs aggregate transactional data, including customer purchases and returns recorded in e-commerce or point-of-sale systems. Furthermore, they compile demographic information such as customer names, birthdates, and addresses, thereby facilitating a holistic understanding of customer profiles.

Quantifying the Value of a CDP

One of the crucial concerns for dealerships is measuring the ROI of a CDP implementation. Understandably, investments need to yield tangible results. The ability to quantify the impact of a CDP on various marketing efforts is paramount. Metrics such as increased engagement, conversion rates, and improved customer experiences can provide quantifiable insights into the efficacy of a CDP. 

Before diving headfirst into CDP adoption, dealerships must assess the health of their existing CRM or DMS databases. This step is crucial to determine whether the dealership is ready to implement a CDP effectively. If a database is plagued by data quality issues, such as duplicate records, inaccurate contact information, or outdated entries, the benefits of a CDP will be increased by a magnitude due to the solutions that are unlocked to solve them.

Validated, corrected, and unified data can serve as a foundation for streamlined sales, enhanced after-sales care, and targeted customer offers. With reliable insights at their disposal, dealerships can craft marketing strategies that resonate with customers, resulting in improved conversion rates, heightened customer satisfaction, and, ultimately, quantifiable ROI.

Navigating Emerging Trends

As the automotive industry embraces trends such as electric vehicles, permanent changes to consumer buying habits, and the role of digital retail, the ability to leverage data becomes even more critical - if not a requirement for future success. These trends demand a deep understanding of customer behaviors, preferences, and purchase patterns. Accurate data serves as the bedrock upon which successful strategies are built, allowing dealerships to personalize experiences, optimize supply chains, and target new market segments effectively.

The impact of Data Quality cannot be understated. By embracing a simple yet effective process, dealerships gain access to accurate and reliable information within days. In this dynamic environment, automotive dealerships must seize the opportunity to future-proof their marketing strategies through a commitment to data excellence. By harnessing the power of data cleansing and accurate customer information, dealerships can navigate challenges, capitalize on emerging trends, and ensure their position as leaders in the industry.

While data is at the heart of modern marketing, the human touch remains irreplaceable. By eliminating the frustration caused by inaccurate communications and outdated details, dealerships can focus on building genuine relationships. Armed with accurate information, sales teams can engage customers in meaningful conversations, directly addressing their needs.

The Call to Action: Embrace Data Excellence

The automotive industry stands at the cusp of transformative change, where data-driven marketing holds the key to success. Accurate data isn't just about avoiding errors; it's about gaining actionable insights over time. With a robust data foundation, dealerships can analyze customer behavior, identify trends, and anticipate market shifts. These insights serve as a launching pad for innovation, allowing dealerships to introduce new products, services, and experiences that align with evolving customer needs. 

Want to see it in action? Schedule a demo



  1. Activator data, surveyed by 300 dealerships.

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