“Consistent data management practices are the key for effective communications, whether to prospects, unsold leads, or customers.”
First-Party Data
This is really your dealer data—the transactional data of sales, leases, and repair orders, as well as the data for your unsold leads and prospects, and any other data that you’re collecting within your dealership or at the group level.
Program data is also first-party data and can be seen through your marketing vendors. This is your engagement data, the opens and clicks from an email, a social ad, or the response from a direct mail. First-party data can also be the web browsing data that resides in Google Analytics or just in general looking at page views for your website.
Your CRM and DMS data, the base for your first-party data, should work in tandem with any program data collected from your sales & marketing efforts.
Second-Party Data
This data source isn’t talked about as much. It’s the data from your affiliates, people you do business with, such as your OEM/s or events you participate in.
Third-Party Data
This is the licensed data for things like demographics, location, aftermarket service, and many others that you may have purchased in the past. While all these data sources have some value, depending on your objectives, the most valuable is always your first-party data, because consumers who have had a transaction with you are going to be the most receptive to your communications and engage with your messaging.
However, it is one thing to have access to a data source. It’s quite another to be able to ingest it within a working marketing program and make it actionable and maintain it over time.
The key is to start with cleansing your data (and to keep it clean).
“Even the largest companies trying to consolidate data, such as for a credit report, can have some margin of error when doing this, but the good ones should stay below 10%.”
Data Enhancement
Data management goes beyond cleansing and normalizing addresses, removing duplicates, or consolidating data – but also includes how to best utilize other second and third-party sources to enhance your data or managing address changes.
Data enhancement is where additional vendor partnerships are a must. Various solutions can help you take consumer demographics, psychographics, previous transaction data, or whether a VIN is still owned by a consumer, as well as other attributes, to provide additional information on the type of consumer and their propensity to engage or transact with you.
Data enhancement can also be valuable to see how many of your consumers are prospective sales, service customers, or unsold leads, and it can reveal your transactional baseline of average new units sold versus used, as well as average services offered each month.
With the right partners, you can go deeper and deeper into validating phone records, appending additional phone numbers, adding street addresses where none may have been recorded before, and understand what more you might need to do to your data to have it as clean as possible and actionable for your marketing and sales efforts.
“You may think your CRM and DMS are clean enough without help but Outsell has found that a dealer’s database can often become 30% more reachable once their data is cleansed.”
So now what? What do you do with this data now that it is in the best condition it’s possibly ever been in? You could send out communications through your CRM, but your CRM can only send based on point in time triggers or time to transaction triggers.
A CRM doesn’t account for deliverability. And a CRM is not necessarily observing behavior and triggering campaigns off those to be more accurate to a consumer’s needs.
That is where Artificial Intelligence comes in.
“Practicing data management and then utilizing that data through AI delivers a consistent and tailored experience at every stage across the customer journey.”
Real Results
You may be wondering: if data management so important, what can I expect from all this effort?
In 2019, Outsell engaged RXA, a leading analytics firm, along with Experian to study the long-term impact of this type of lifecycle engagement. The study was not based on leads or clicks, but rather at the change in sales and service behavior over time, comparing those who received lifecycle communications to those who did not.
The study included 960 dealerships, 5.6 million consumers, and more than 63 million vehicle purchases over 3 years, as well as more than 60,000 cohorts—or segmented groups of consumers based on life stage, purchase type, and service frequency—from all brands and all regions across the United States.
The study found that consumers who received lifecycle communications were more loyal than those who did not, resulting in improved dealer retention and profitability across all customer life stages.
- Lifecycle marketing increases the rate of repurchase by more than 23% on average across all life stages.
- For those who did repurchase, those that were treated with lifecycle marketing were 49% more likely to purchase from the same dealer.
- Customers who received communications throughout their lifecycle also serviced 31% more frequently than those who did not.
- Frequent servicers at each dealership repurchased 19% more often after receiving lifecycle marketing communications.
- When comparing the 3-year gross profit from those who received lifecycle communications and those who did not, they averaged $427 more gross profit. Multiply that across a dealership’s entire database and it represents a significant increase in profits—a 65% increase over customers who did not receive lifecycle communications.
Many solutions out there that say they are powered by AI are limited. They follow business rules, or a cadence based on the VIN rather than listening and capturing consumer behaviors to continually refine the messaging toward the experience the consumer expects and how they wish to be engaged with.
“Take a close look at your data and make sure it is being managed in a way that serves our goals rather than sitting stagnant.”