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Exhibiting at the NADA 2012 Convention and Expo in Las Vegas was very interesting. One of the hottest topics was the “third party data access” controversy that has been unfolding over the last few months. From a DMS provider’s point of view, there are certainly ways that we can help dealers maintain control of their data, such as offering a free data protection service. But as I see the state of things right now, I’d be willing to bet that not a single dealer out there truly has control of their data.
To understand why not and what can be done about it, I’d like to clarify the four key issues involved:
In conclusion, the way things stand right now, there’s not a single dealer who truly has control of their data. Fortunately, this situation can be corrected.
How To Fix It
My suggestion to dealers would be to start by reviewing all contracts with third-party vendors. Require the language to be very specific regarding the following:
- What type of data is pulled, how often and from which part of the system. This is where DMS providers can offer the most help, by performing monthly audits and providing dealers with the above information. That way the dealer can check and see if vendors are indeed pulling the agreed upon information.
- If possible remove all language that relates to sharing or re-selling information. However if doing so is required for the vendor to do their job, this won’t be an option. Instead, the dealer should know exactly what type of data is shared or sold, and to whom – listing the specific names of all the affiliates.
- The dealer should request to see the agreements between vendors and their affiliates, and demand the same type of language be in their agreements, so they know what the affiliates are doing with the data.
- Dealers have the right to full transparency in terms of what purpose(s) the data is being used for, from both their vendors and the vendors’ affiliates.
- Dealers should review all agreements with OEMs and ask them who is actually accessing the data, then ask to see the agreements between the OEM and any vendors they sub-contract the access to.
Of course you can see how daunting this process would be for both dealers and vendors. One vendor may have half a dozen affiliates, and some of those affiliates may have affiliates. There may actually be up to a dozen parties involved in a single process.
How do dealers know if and when they have regained control of their data? When they know exactly where every piece of data goes and how it’s being used, even as that data moves far downstream from the DMS where it originated.
Unfortunately there are no easy solutions to this controversy. But with diligence and time, dealers can regain control of their data to ensure it never benefits a competitor or is used in some other way that harms the dealer.