Macroeconomic and industry-specific challenges continue to impact how dealers do business. From inflationary pressures and rising interest rates to vehicle inventory challenges, fluctuating prices, and now the UAW strike, the automotive sector is challenged on multiple fronts.
Combined with shifting consumer expectations and buying preferences, these hurdles make it more important than ever to garner every possible advantage to ensure a strong bottom line—and data can help.
It’s no secret that dealers need data to drive their business. They already collect it, but understanding the value of different types of data and what to do with it can prove challenging.
Dealers leave money on the table when the data at their fingertips isn’t being optimized and activated. A thorough understanding of various types of data and clarity on how to activate it offers benefits for both operational efficiency and marketing impact. With the demise of cookies looming, taking advantage of data – particularly owned, first-party data – will close more deals and drive greater profits.
First-party data is a treasure trove for dealers
Let’s start with a quick primer on first-party data. This is the information your business has collected directly from your customers, prospective customers, and visitors to your website each time they interact with your brand online. It may be stored in your CRM or DMS and may include some OEM data.
Unlike second-party data from partners or third-party data aggregated from multiple sources and sold to your business, first-party data stems straight from consumers’ direct engagement with your brand. Whether captured through your website, in response to digital marketing campaigns, or through the sales process, first-party data is typically the most accurate, relevant, and cost-effective source of valuable insights, making it a treasure trove that can be tapped to enhance the customer journey at every step and bolster the bottom line.
This is particularly true given the pending “cookieless future,” a significant change in the digital landscape with major implications for consumer marketing. Third-party cookies, the digital trail left when we visit websites, are expected to go away for good by late 2024. Absent this valuable online browsing history and behavior data, dealers, like companies across industries, will be ever more reliant on capturing, interpreting, and activating their own – first-party – data, to create personalized brand experiences.
Today, at every step in the customer journey, consumers expect a bespoke experience. From initial online research to price comparisons and options exploration, and all the way through to preorders, F&I negotiations, and final purchase, today’s buyers want relevant content that aligns with their individual preferences, is delivered when they need it and on the platform of their choice. First-party data makes this possible.
Activating your data FTW
Collecting first-party data from customers and prospects isn’t enough. Nor is enriching it with relevant second and third-party data. The true value comes in what you do with it. By optimizing how data is activated, dealers can expect to:
- Capture higher value leads
- Attract and connect with ideal customers
- Increase profits and ROI through smarter marketing spend
- Improve customer satisfaction, retention, and loyalty
Remember, because you collected it, first-party data is the most dependable and most relevant to your business, allowing you to gain insights into who the consumer is. For example, the data will reveal what pages on the dealer website the user has visited, which offerings or vehicles they looked at, when they signed up to receive email notifications, how many videos they watched on your site, and more. Based on this actual behavioral information, dealers can predict what action they’re likely to take next to determine the most effective marketing and service strategies to meet their needs.
Specific examples of how to activate first-party data include:
- CRM – Establish custom timelines, communication assets, and marketing funnels based on shopper behavior and preferences
- Website – Optimize the online experience to reflect user page views, content consumption patterns, duration on site, and other activities
- Email and social media – Customize the buyer journey with data and insights rooted in email open rates, follower engagement, and more
In addition to pairing data from online customer activity with information from in-person dealership interactions, effectively activating these insights also includes grouping them with other consumers that have similar interests or demographics. From there you can build conversion-ready campaigns and audiences reflective of who they are and what they have shown you they’d be interested in. This type of personalization “at scale” allows you to stand out from competitors, build trust and confidence, improve engagement, and, ultimately, capture a greater share of the customer’s wallet.
Digital retailing tools can help
Unlike eCommerce, through which the consumer shopping and purchase journey takes place entirely online, in digital retailing the consumer starts the deal online and can take it to a credit application or even a credit decision, at which point dealership personnel engage with the consumer to usher him or her through the deal. Third-party digital retailing tools can prove beneficial for ensuring shoppers can easily find a way to connect with a sales associate, there are multiple communication options available, prompts are simple and prominent, and it’s easy to navigate deal-building steps. The right technology can help increase dealer exposure and reach, increase vehicle turn rates, improve acquisition and inventory, close deals faster, and bolster profits.
Today’s challenging dealer environment has created a huge opportunity for continued innovation and advancement. Retailers that embrace new realities; welcome the benefits of capturing, connecting, and activating data; and evolve their operations to reflect consumers’ increasingly digital shopping preferences stand to win. Is your dealership equipped to benefit from the power of data?