Mike Dececco, Vice President of Business Development at Fullpath, talks to us about the emerging trend in automotive: CDPs. He reviews the value they provide in sales and service marketing and provides specific examples of how it can supercharge new sales as well as retention in your dealership.

Can you define a CDP?

CDP is another acronym that dealers need to learn now, which is always frustrating. But honestly, what it does is it takes all of the disparate data sources that a dealer is currently using. So CRM, DMS, website data, service data, anything we can get our hands on, chat data, whatever it might be, pulls all of that into one place, analyzes it extensively, cleans all the data, and then can execute outbound messaging to consumers based on an audience that they may fall in. It's a lot more than just marketing automation. A CDP can give dealers the ability to pull unique lists of customers based on certain criteria that they can take action on. 

So think about it as if you're sitting there as a General Manager and you're looking around the dealership and saying, Why isn't everybody on the phone right now? The showroom isn't full. Who do we call and why? So with the CDP, when you pull all of the data together, you can tell a story to a salesperson to load their lips to make a phone call. One of the main reasons that people don't pick up the phone and make a call is because they don't know what to say and they don't know what to say because they don't have all the information to feel confident about having a conversation.

Think about this example. If you're a salesperson in a dealership and the CDP could give you a list of, hey, here's all the people that are in a positive equity position. Here are all the payments that they could possibly have on all of the inventory that we currently have in stock. And here are all the VDPs that this person recently viewed. So now you can actually make a phone call that you have all the information. Hey, Steve, I realize that you're driving a 2017 Tahoe, and you might want to be careful, right? There's a little bit of a creep factor here because you have all the information. So you know that in this particular instance, Steve has been on your website and they're looking at new Tahoes. So it's, hey, you're in a positive equity position on your Tahoe, were given top dollar for trades right now and I've run some payments for you on some new Tahoes just in case you're interested in having those conversations. Now, you know that they're interested because they're already showing that intent by viewing those VDPs. So the power is the correlation of data. If you know somebody is on the website, that's one thing. But if you know that they've been on the website and they're also in a positive equity position and you have the talk tracks to reach out and communicate to that person proactively, that's kind of where the rubber meets the road.

That's just one example of what a CDP can do, but you can also do some really interesting other things like active advertising suppression. So for example, if you're integrated with call tracking into your CDP, if somebody calls and makes a service appointment for two weeks from now, you don't need to advertise to that person for service, because the job's already done. You've already booked the service appointment. The CDP can shut down advertising and suppress advertising to certain people who have already transacted. The same thing holds true on the sales side. So if somebody just bought a car, if you're connected to the DMS, you know that that transaction occurred and you're connected to the advertising as well and the audiences, then there's no reason to serve somebody advertising after they've already purchased a vehicle.

We see it happen all the time, not just in automotive but in other industries. I recently bought a golf club and I'm still being followed like 45 days later for the exact golf club that I've already purchased. The reason why that's happening is because the company that I bought the golf club from doesn't isn't connected to the transaction. They don't know that I purchased the club. I'm still in their retargeting cycle. Right? So if you connect all the dots, that's when it gets really, really cool and you can save a bunch of money and you've got a whole bunch of really unique insights.

What is the relationship between a CRM and CDP?

I can't speak to our product development roadmap, but I don't foresee us going into the CRM space. It is a very crowded space and it's a very mature space. There are a lot of really great players that we are partnered with in that space, and we don't really have any interest in going after that.

What we're here to do is to help the CDP talk to the DMS, talk to the service scheduler, and talk to the call tracking. Think about us as the data layer that makes sense of all of those different products. We don't want to change a dealer's behavior necessarily. We want to give them all the information to make the behaviors that they're doing more effective.

You can imagine if you're working in a CRM and a CDP at the same time, the CRM isn't connected to the DMS, so it can only give you the insights that it has available based on the consumer's activity or inbound outbound communications between the consumer and the salesperson. But the DMS has all the transactional data, right? If you connect that together in a CDP layer, now you know this person has a much higher lifetime customer lifetime value than somebody else. That gives you insights when you're reaching out to particular leads. You're going to likely treat a lead differently That's bought four cars from you and has $1,000,000 worth of lifetime customer value than a fresh lead off the street that you have never had any business with. What the CDP does is connect all that data together to give you the information, but it's not a place where you're directly outbound communicating to customers all that often. The CRM is still the best place to do that.

How do you approach data hygiene in the dealership?

Yeah, that's a great question. What will work with third parties, anybody that's in the space, Experian, Equifax, or whoever can help us clean the data. 

I think your point is a really good one. I think it actually starts at the dealership. Going back to my Dealer.com days, we had a proprietary CRM. Our own kind of CRM, we called it DNA because we need another acronym, right? So we called it DNA, but we had a saying and it's just like a lot of organizations do now, if it's not in DNA, it didn't happen.

What we need to do is help dealers understand that the minute things that might not feel important, like making sure you get that email address double-checked, making sure you got that phone number, double check the address of the consumer, all of those things, we want to make sure that the dealership has a process in place to ensure that their employees understand, that getting that accurate data in the system is going to ultimately benefit them in the future. It's not just because we're being a pain in the neck. When they understand that all of that data is going to be leveraged on their behalf to generate more opportunities, then they pay more attention. And so it's kind of like a systemic issue in automotive is like crap data in crap results out, so we definitely do a lot of work to help the dealers clean up those databases so that we can effectively start to market to those consumers.

The impact of closed vendor platforms.

I think it's taken so long to get there to get to this place, and I think it's because automotive, just speaking from all my experience in the space, has generally been a whole bunch of walled gardens. This company doesn't have an integration with this company because they compete in this way or this company doesn't have an integration with this company and doesn't want to play in that space because they compete in this other way. And I think we've seen outside of automotive that a really robust ecosystem of open APIs is how you make a CDP really effective.

One of the things that we're focused on at FullPath is being very, very, very open with our data. For example, a dealer can set up APIs and directly send their audience data to other providers. We don't necessarily care if they're using somebody else for their digital advertising. We'll make sure that that provider gets the data they need to effectively execute. I think that's kind of a system problem that we've had in automotive is people kind of holding on to their space and a very walled garden. And we're starting to see now more and more companies standing up really robust APIs so that dealers can leverage the stuff that they're doing with that company in all of their other strategies, and when that happens, everybody benefits,

It’s time for open integration.

What's happening is, you know, there's so much available, but without consolidation, there will be no execution. So all these systems have to talk to one another. And, you know, in automotive, we're always behind, right? Or we're like 7 to 10 years behind the rest of the world. We're getting there now. All throughout my career, it's like I've had numerous scenarios where a dealer says to me, Well, hey, you know, I use this other company. Why can't you guys just have a conversation and figure out the way that we should do this? And that happens every single day in our space. That's part of the reason why I joined FallPath because the CDP is an open platform that accepts and transmits data in an effective way so others can leverage it. 

It's really going to be the third pillar moving forward. You've got the CRM, the CDP, and the DMS, and those three things are kind of the core fundamentals, but the CDP can interact with all of those ancillary systems that the dealer is using and then inform them based on all of those signals that it's getting from all these other areas. It can inform partners on how to engage with that consumer or it can inform Fullpath ourselves to be able to engage with that consumer.

But it's really just about what's the right thing for the consumer. What's the best experience and the best experience for the consumer and the best experience for the dealer in the same regard is an open relationship between all of the vendors that they work with so that the dealer's best interests are always at heart.

It's one of those things where it's been very fragmented for very many years. And you've seen huge players in the space that have acquired many companies and tried to put them all together to create this. And it hasn't happened yet. It requires a third-party disruptor that's unencumbered by all of these legacy revenue streams and things like that to be able to say, hey, there's a problem and we're just going to fix it and we're not going to worry about we don't want to do that because we have this other company over here that competes with this or competes with that. We're not encumbered by any of that. And the CDP players are the ones that are walking in with open arms as opposed to cross arms.

What pushback do you get from dealers?

First of all, they don't necessarily understand what it does. It's not necessarily a tool that you're in all the time and clicking around and using it for a million different things. We're starting to build that into the CDP now. It's evolving into a more, you know, dealer active tool, but the pushback we get is, well, I already have a lot of this stuff in my CRM or I already have a lot of this stuff in my DMS. We say that, yes, you do, but they don't talk to one another. It's like your DMS speaks French and your CRM speaks Japanese. We're the translator We'll pull those two things together and make sense of it and give and give you a way to actually leverage the insights when you actually have those data sets connected because it gives you tremendous power when you pull all of that stuff together.

How should a dealership be structured to maximize the value of a CDP?

The cool part about it is that most of what happens in the CDP is automated. They don't necessarily have to have processes in place other than I would say that, you know, speaking from experience, I would say, make sure that you're getting as clean data as you possibly can into your systems. That's going to save you frustration down the line for having to append and make sure that you're cleansing all of that data.

You're going to have to do that sporadically anyway, right? It's never going to be perfect. So the first piece is what's going into the system? Are you doing a really good job getting in there? The second thing is,that you don't really have to think too much about what to do with it once you've stood up the CDP layer. 

Because that's what the CDP does. It pulls all the data together and if you're using, let's say, Fullpath for digital advertising, our digital advertising is being powered by all the audiences and different customer categories that are being that are being stood up every day. All of those audiences are being refreshed every day because one day somebody might be a new lead, and the next day they might have had an appointment, so they're in a different bucket. All of that is happening automatically. They don't really necessarily need to change their in-store process in any way, but they can rest assured that because the data is all being put into one place and organized, their consumers are getting the right message at the right time.

And then anything that's happening in the CRM or a BDC where people are making phone calls, that's all gravy, right? That's all icing on the cake because the CDP is doing all the hard work of who is this customer, what have they done, and what they need to see now based on their last activity.

The core kind of tenets of what a CDP is, (everybody wants to be a CDP these days. We were and we were we were just at NADA, we've got 20 new CDPs that just popped up in the last month and a half because CDP is in the zeitgeist). The core competencies are a customer record that shows everything that the customer has done since the beginning of time. Every transaction, every ad they've clicked on, every email they've opened, every VDP they viewed, every transaction they've had with the dealership, including the grosses and everything. It shows everything about a singular view of a customer from the beginning of time that they interacted with you because we'll go back 7 to 10 years of data to pull all of that out. Since the beginning of time, everything that they've ever done with the dealership. and then does the previous action dictate the next marketing action or the next action to be taken? Those are kind of the two core tenets of what a CDP does. And I don't think a dealer really has to do much. I mean, other than sit back and count cash.

How can a dealership clean up their data?

There are two ways to do it right. You can work with there's a myriad of data companies in automotive. I named a few at the beginning of the conversation. Any one of those companies can you can bang your current and it sounds terrible, but you can bang your current database up against that and it will append and refresh and make sure all of that data is clean. You can do that, you know, as often as you like, but if you do it, it's not necessarily inexpensive to do, right, because you're talking about huge datasets.

But if you do that, you don't want to have to do that all the time, so when you're signing up for a CDP, get your data cleaned up, make sure everything's good to go spend whatever it takes to make sure that that's right. Because if the data is right, then everything will be right. Then instill a process in the store and let people know, Hey, guys, we can't have a customer@dealership.com anymore, right? This is something we have to ensure that we're doing because it affects them individually. If you're putting the wrong data in and you're the service advisor and that customer's not getting your service emails, then that customer is not coming in for their next service to see you and you don't get the next opportunity to upsell that customer, which is part of your job as a service advisor.

They all roll up and talk to each other. It's all important. So clean it up first and then put a process in place to ensure that your people are doing what they need to do to make sure that the data is correct. And then you'll have to do that much less often than your initial setup.

Dealers should have a strong data collection process.

You can save yourself a lot of expense by having a really nice process in the store for ensuring that as you're onboarding new employees at the store, say, Hey, this is our policy, this is how we do it. There are no exceptions. You have to collect the email address, you have to collect this, you have to collect that. There are no exceptions. 

And then I mean, any dealer should have a really strong data collection policy at this point, because you set it right and think about what's sitting in all of these systems. You've got decades of highly relevant customer information and customer activities directly in your DNA. You've got the Holy Grail. If you just nail your data strategy and can communicate with the customers you've already spoken to effectively, then you don't have to spend nearly as much money going out and acquiring new ones. You've already spent all of this money out, $600 on average, right, to sell a vehicle. You spent all of that money already to generate all these leads. It makes a lot of sense to just focus on the house as the core of your strategy. How do we take the customers we've already done business with and ensure they come back for service and they come back for their next car so we don't have to spend 600 bucks again to acquire a new customer?

How can a CDP impact retention?

Retention is the nucleus. It's the reactor. You know, it's the thing that's powering everything, and that's why the CDP is important because it's not siloed.

So you can leverage data out of your CRM. It's great. You can export a customer list, you can do all kinds of stuff like that. It's fun, right? But if you don't have the DMS data and the service data, all the phone calls that customer made and all the chats that they had, reviews that they've left, everything is consolidated in that customer record, then more often than not, you're going to send the wrong message at the wrong time than if you had all the information to send the right message.

It's so common `sensical. It's kind of crazy, right? Before you reach out to the customer automatically, you know, if it's automated or it's not, make sure you have the right information. Not rocket science. 

It's just like anybody in any sales job has ever done. Right before you pick up the phone and you call somebody, you've got to know some things. Cold calls are difficult, but when you make cold calls, I did it back in the day at a dealer, I'm looking at a dealer's website and I'm figuring out who this person is I need to talk to and what are they like and what is their job. You have to have some information to actually have a productive conversation or have a productive interaction. 

The same thing holds true when you're reaching out

to the customers that you already have. You don't want to send them a direct mail about a car that they haven't owned for four years. That is a waste of your money and it's a waste of their time and it's a bad look for you.

So get your data house in order and leverage it. And you're going to find that you're going to have to spend a lot less money acquiring new customers because you're doing such an amazing job keeping the ones you've already had.

How does Fullpath use AI? 

If you were to think about the core data as, like the nucleus, and then outside of that you have an AI layer that is analyzing all the activities that are occurring or all those many tens of hundreds of thousands of customers and determining which bucket that customer goes into all the time.

I might one day submit a lead to the dealership. So I submit a lead, but I don't anybody back. I don't do anything. Then I'm on the VDP. Now, we looked at the VDP, so I'm getting retargeted. That's very basic. But now let's say that I get an email that was sent to me because the dealership collected my email address when I submitted the lead. Now I click on that email. My identity is completely resolved, so now they know who I am. They know I've been connected, all my data is connected and they know that I'm Mike Dececco, right? The AI knows that Mike Dececco likes to buy Audis. He's looked at these four Audis in the last three months. What it can also do is pull together data points from other areas. So, for example, let's run payments on all of these Audis that Mike just happened to be looking at, and let's send him an email with these three vehicles that he looked at with payments for 48, 60, and 72 months, by the way, and here's the lease on the new cars that you looked at. AI can develop all of that for us and send those messages automatically. 

And that's where everything's going. It's super rad not to date myself, but it's super rad.

What is the future of CDPs?

I think when we go to NADA in three years, you're going to see a completely consolidated customer view across all tiers in automotive. And I think that's where it's going, right? We're talking to an untold number of manufacturers right now about, hey, like dealers got all of this fantastic data, right? We have all of these incredible incentives and all these things that we need to make sure get pushed down to tier three, but not just down like the way it's been right now. Mostly is like, hey, you know, here is a really incredible offer on whatever vehicle it is, and let's make sure if send that offer out to all the website providers and then all the website providers have to update the information on all the sites. 

So I think we're going to see a huge amount of cooperation between the tiers. You're going to see and we're doing this already for some manufacturers, regionalized incentives being displayed specifically on dealers' websites automatically because we're getting a feed that's coming down from tier one and then we can disseminate that based on region, based on individual dealer offers. If they have an offer that's better than the regional offer, we're going to see this coordination between the tiers. I want you to think about a scenario. Imagine it's 2028 and you go to Kia.com. You're already a customer. You're already driving a Kia and you land on Kayak.com because you're curious about the new Kia models.

Right now, you can open up a chat and say, hey, you know, are you a current customer? Yes, I am. Give us some information about you. What's your name? Maybe the last for your social. I don't know. I'm just spitballing here, but I want you to think about what the scenario could be. Okay. Here's my information. We all know that the next generation of consumers are very willing to just give out. It's all about convenience. Make it easy. 

So cool. Here's all my information. Now, you could directly pipe in key financial services data. You pipe in their insurance data, you could pipe in everything and literally create deals and hand fully baked deals to the dealership because you used AI to connect all the dots for all the players and it would make deals super easy for dealers at tier three. Not that they're not easy right now because they're slaying it, but for example, if you actually had all of that data connected from the tier one level all the way down to the tier three level, and that's where we've wanted the automotive industry to go for so long. How do we leverage that data across all these tiers to give the customer this ridiculously convenient experience where they just buy a car and the dealer in their market gets the deal and they buy the car, right?

But that's not the way it is right now. It's still very, very disjointed. I have to go to tier one. I'm going to fill out a form that's going to go to the dealer. I'm going to get a totally different process from one dealer to the next. It's totally not uniform. I think we're going to see even more consolidation in the marketplace on data strategy and consumer experiences like we've seen outside of automotive.

The dealerships are not going to be changing the systems that they're using, but they're going to be extracting the data from those systems and taking action on it and making it much more effective than it is today. 

Because, I mean, I've seen it just this year. I'm talking to so many partners about integrating into the CDP. And, you know, everyone is starting to think about, hey, I really need to stand up a really robust API and it makes sure that if a dealer wants to use my widget for whatever it is the data from that widget can be leveraged in other areas inside the dealership.

That's going to be the thing that's going to change. We're going to start to see much more cooperation between vendors that understand that they become more powerful and more sticky when they play really nicely with everyone else. I think we're going to see a dramatic shift in the next few years.