There are many things that companies can do to earn a customer’s loyalty. However, e-mail marketing isn’t typically high on the list. Consumers get barraged continuously with marketing messages via e-mail. As you go through your in-box, how many do you delete without even reading them in order to get to those you are interested in reading? A very good article on the Small Business Success blog shared some tips on how to write e-mails that will more effectively engage the recipient.

Consider these statistics shared in the blog article:

1. Personalized emails improve click through rates by 14% and conversion rates by 10%.
2. Leads who are nurtured with targeted content produce a 20% increase in sales opportunities.
3. 70% of buying experiences are based on how the customer feels they are being treated.

In my recent data series blogs, I covered how dealers who use their data to effectively target consumers with relevant messages will increase responses. When relevant messages are relayed to the right customers, they tend to feel the company is more in tune with their needs and wants. They no longer feel like just another address on your e-mail list. As you establish a relationship with the customer, they will begin to value your communications and pay attention to them, rather than discard them into their trash, spam or, worse, opt-out of your marketing.

Targeting segmented customers is definitely something dealers should be doing. However, the content of any email message is equally important. Generic e-mails that are obviously sent en masse will detract from the consumer’s perception that you are actually looking out for their best interest.

In order to increase the chance that a customer perceives your e-mail message as helpful rather than intrusive, try and make your e-mails as personalized as possible. If you have cleaned up your data, it is relatively easy to insert a customer’s first name and the make and model of the vehicle.

At the same time, ensure that any attempts to send personalized messages to your customers are not destroyed by poor attention to details. Double check that there are no improper formatting or incorrect merge fields because of erroneous data in the wrong fields in your CRM.  

In the end, it’s not just about using past behavior to predict the future. It’s also about how you can best convey your message to your target group. If your customers only receive helpful reminders and relevant messages from you, you will build relationships that help create loyalty and increase retention.

There are many things that companies can do to earn a customer’s loyalty. However, e-mail marketing isn’t typically high on the list. Consumers get barraged continuously with marketing messages via e-mail. As you go through your in-box, how many do you delete without even reading them in order to get to those you are interested in reading? A very good article on the Small Business Success blog shared some tips on how to write e-mails that will more effectively engage the recipient.

Consider these statistics shared in the blog article:

1. Personalized emails improve click through rates by 14% and conversion rates by 10%.
2. Leads who are nurtured with targeted content produce a 20% increase in sales opportunities.
3. 70% of buying experiences are based on how the customer feels they are being treated.

In my recent data series blogs, I covered how dealers who use their data to effectively target consumers with relevant messages will increase responses. When relevant messages are relayed to the right customers, they tend to feel the company is more in tune with their needs and wants. They no longer feel like just another address on your e-mail list. As you establish a relationship with the customer, they will begin to value your communications and pay attention to them, rather than discard them into their trash, spam or, worse, opt-out of your marketing.

Targeting segmented customers is definitely something dealers should be doing. However, the content of any email message is equally important. Generic e-mails that are obviously sent en masse will detract from the consumer’s perception that you are actually looking out for their best interest.

In order to increase the chance that a customer perceives your e-mail message as helpful rather than intrusive, try and make your e-mails as personalized as possible. If you have cleaned up your data, it is relatively easy to insert a customer’s first name and the make and model of the vehicle.

At the same time, ensure that any attempts to send personalized messages to your customers are not destroyed by poor attention to details. Double check that there are no improper formatting or incorrect merge fields because of erroneous data in the wrong fields in your CRM.  

In the end, it’s not just about using past behavior to predict the future. It’s also about how you can best convey your message to your target group. If your customers only receive helpful reminders and relevant messages from you, you will build relationships that help create loyalty and increase retention.

​Recently, AdAge reported that Walmart is starting a loyalty program. Based on their price-match guarantee, Walmart is launching an app named “Savings Catcher,” which consumers can use to receive refunds for items purchased at Wal-Mart that have been found for a lower price at a competitor. While many stores have price-match guarantees, this app ups the ante. In the past, customers were responsible for discovering the lower prices and then bringing a physical ad into a Walmart for the price match. This, of course, required time spent by the customer researching their purchase online. Unless a customer is aware of a lower price, or discovers one accidentally, it is unlikely many will spend the time researching all of their purchases just to save a few dollars. “Savings Catcher,” however, doesn’t require any time for a consumer to take advantage of these savings. According to the article, all shoppers need to do is scan a receipt for the items purchased at Walmart into the app. A third-party tracking firm will then discover the lower prices for them and refund the savings to the consumer in the form of a Wal-Mart gift card. Many consumers already view Walmart as having low prices, which is why consumers flock to the stores in droves. The addition of this loyalty program is likely to further instill this into consumers and attract even more customers.

While a businessperson might question how the “low price leader” that sells on slim margins can afford to do this, the answer is actually a very simple one. Data.

By participating in the program, consumers are trading information. This information will allow Wal-Mart to encourage shoppers to buy even more items from them using a pretty unconventional approach. Most companies use loyalty data to increase marketing effectiveness through targeting. Walmart, however, says they aren’t going to. According to the article, Walmart is going to give consumers access to complied loyalty data that will let the customer search and sort their receipts; get pie charts breaking down how they spend their money; generate ‘predictive shopping lists;’ keep a running tab of in-store purchases to stay on budget; get notifications when there’s a manufacturer coupon available for an item on their list; or get the best-priced bundle of items within a pre-set budget. Senior vice president of e-commerce and mobile for Walmart said, “We found the best shopping list is one you don’t actually have to create.”

It’s certainly an interesting concept. Whether Walmart shoppers will embrace the many features available within the application to dictate their shopping lists remains to be seen. It’s certainly easy to see how the pricing guarantee and automatic refund feature would be attractive, not only to Walmart’s existing customers, but to new customers. If this program is proven to work as described, and the third-party pricing comparison is accurate, it could instill even more confidence into shoppers that Walmart really is where they will save the most money. And not just on sale items, but on everything. And that is a pretty powerful incentive for people to shop at Walmart.

​Recently, AdAge reported that Walmart is starting a loyalty program. Based on their price-match guarantee, Walmart is launching an app named “Savings Catcher,” which consumers can use to receive refunds for items purchased at Wal-Mart that have been found for a lower price at a competitor. While many stores have price-match guarantees, this app ups the ante. In the past, customers were responsible for discovering the lower prices and then bringing a physical ad into a Walmart for the price match. This, of course, required time spent by the customer researching their purchase online. Unless a customer is aware of a lower price, or discovers one accidentally, it is unlikely many will spend the time researching all of their purchases just to save a few dollars. “Savings Catcher,” however, doesn’t require any time for a consumer to take advantage of these savings. According to the article, all shoppers need to do is scan a receipt for the items purchased at Walmart into the app. A third-party tracking firm will then discover the lower prices for them and refund the savings to the consumer in the form of a Wal-Mart gift card. Many consumers already view Walmart as having low prices, which is why consumers flock to the stores in droves. The addition of this loyalty program is likely to further instill this into consumers and attract even more customers.

While a businessperson might question how the “low price leader” that sells on slim margins can afford to do this, the answer is actually a very simple one. Data.

By participating in the program, consumers are trading information. This information will allow Wal-Mart to encourage shoppers to buy even more items from them using a pretty unconventional approach. Most companies use loyalty data to increase marketing effectiveness through targeting. Walmart, however, says they aren’t going to. According to the article, Walmart is going to give consumers access to complied loyalty data that will let the customer search and sort their receipts; get pie charts breaking down how they spend their money; generate ‘predictive shopping lists;’ keep a running tab of in-store purchases to stay on budget; get notifications when there’s a manufacturer coupon available for an item on their list; or get the best-priced bundle of items within a pre-set budget. Senior vice president of e-commerce and mobile for Walmart said, “We found the best shopping list is one you don’t actually have to create.”

It’s certainly an interesting concept. Whether Walmart shoppers will embrace the many features available within the application to dictate their shopping lists remains to be seen. It’s certainly easy to see how the pricing guarantee and automatic refund feature would be attractive, not only to Walmart’s existing customers, but to new customers. If this program is proven to work as described, and the third-party pricing comparison is accurate, it could instill even more confidence into shoppers that Walmart really is where they will save the most money. And not just on sale items, but on everything. And that is a pretty powerful incentive for people to shop at Walmart.

[This is part 6 in the “What’s the Big Deal With Data Anyways?” series. Click here to read part 5]

The whole goal of this series is to help dealers understand that there is no need to be afraid of your data. It is one of the most valuable assets a dealership has and, when used correctly, can increase revenue by improving the effectiveness of any marketing.

Previously in this series, we covered segmentation of the DMS and CRM database. If you view those segments as control groups, you will be in a better position to view the real ROI of your data marketing efforts. Measuring ROI is not easy. But you don’t need to be a statistician to succeed. You simply need to measure certain elements for your data marketing efforts and compare them to customers who are not part of those efforts, segments or control groups.

In a dealership, the four most important metrics for measuring ROI are:

1. Average customer-pay RO amount for the segment customers vs. the non-segment customers.
2. Annual visit frequency for the segment customers vs. the non-segment customers.
3. Annual retention rates of the segment customers vs. the non-segment customers.
4. Vehicle repurchase activity of the segment customers vs. the non-segment customers.

You don’t have to rely on third-party marketing companies to take your data and tell you how to market. They generally lack knowledge about how to measure a targeted marketing campaign’s results. Therefore, you’ll never know if your efforts are succeeding.

The most effective way to measure ROI, program lift and retention is to assign every customer to a type of control group. Control groups can be determined by any number of qualifiers such as: make or model, mileage, distance from the dealership, lease customers, pre-owned customers, parts customers, time elapsed since purchase or any other segments that could be used in targeted campaigns.

While this may sound like a daunting task, believe it or not, most dealers are well on their way to accomplishing this already. Many assign every customer a unique customer ID number in service and, at times, in sales. This ID number is stored in a dealer’s DMS as a unique identifier for that customer. The dealership uses this ID to track activities such as vehicle service records.

To segment your database you simply need to add a check digit to the already existing customer ID number. This number appends the customer ID in the DMS. By simply adding multiple number identifiers, customers can belong to a single group, or to multiple groups.

Once your customers are segmented into the appropriate group(s), your DMS’ report writer function (or equivalent) will allow you to run simple reports that show exactly which groups and customers are responding the most, spending the highest and retained the longest.

When looking at the four metrics listed above, it becomes easy to see which subsets of customers are performing the best in each category. This can assist in identifying where to spend your marketing budget. It has always bothered me when I ask a service writer or manager which of their service marketing efforts are working the best. I find that their responses are typically based on that month’s coupon redemptions. This type of visual performance tracking of service marketing is a recipe for wasted marketing dollars.

Throughout this series I have been touting the benefits of customer segmentation and the positive effect it can have on your marketing efforts. Think about looking at each group before you commit to any marketing campaigns, regardless of the content. It is so important to determine ahead of time which groups will receive the message based upon their past performance. How many times do we send, at our expense, communications to customers that either live too far from the dealership, or don’t have the vehicle anymore? This type of marketing is almost guaranteed to get no response, yet it is such a common practice in our industry. I see it almost every time I step into a dealership. Insist that your marketing group, regardless of if internal or a third party, is responsible for marketing the correct message to the correct group. It has been proven over and over again in almost every type of business that smaller, highly target messaging will create a much better response than any unrelated mass approach.

[This is part 6 in the “What’s the Big Deal With Data Anyways?” series. Click here to read part 5]

The whole goal of this series is to help dealers understand that there is no need to be afraid of your data. It is one of the most valuable assets a dealership has and, when used correctly, can increase revenue by improving the effectiveness of any marketing.

Previously in this series, we covered segmentation of the DMS and CRM database. If you view those segments as control groups, you will be in a better position to view the real ROI of your data marketing efforts. Measuring ROI is not easy. But you don’t need to be a statistician to succeed. You simply need to measure certain elements for your data marketing efforts and compare them to customers who are not part of those efforts, segments or control groups.

In a dealership, the four most important metrics for measuring ROI are:

1. Average customer-pay RO amount for the segment customers vs. the non-segment customers.
2. Annual visit frequency for the segment customers vs. the non-segment customers.
3. Annual retention rates of the segment customers vs. the non-segment customers.
4. Vehicle repurchase activity of the segment customers vs. the non-segment customers.

You don’t have to rely on third-party marketing companies to take your data and tell you how to market. They generally lack knowledge about how to measure a targeted marketing campaign’s results. Therefore, you’ll never know if your efforts are succeeding.

The most effective way to measure ROI, program lift and retention is to assign every customer to a type of control group. Control groups can be determined by any number of qualifiers such as: make or model, mileage, distance from the dealership, lease customers, pre-owned customers, parts customers, time elapsed since purchase or any other segments that could be used in targeted campaigns.

While this may sound like a daunting task, believe it or not, most dealers are well on their way to accomplishing this already. Many assign every customer a unique customer ID number in service and, at times, in sales. This ID number is stored in a dealer’s DMS as a unique identifier for that customer. The dealership uses this ID to track activities such as vehicle service records.

To segment your database you simply need to add a check digit to the already existing customer ID number. This number appends the customer ID in the DMS. By simply adding multiple number identifiers, customers can belong to a single group, or to multiple groups.

Once your customers are segmented into the appropriate group(s), your DMS’ report writer function (or equivalent) will allow you to run simple reports that show exactly which groups and customers are responding the most, spending the highest and retained the longest.

When looking at the four metrics listed above, it becomes easy to see which subsets of customers are performing the best in each category. This can assist in identifying where to spend your marketing budget. It has always bothered me when I ask a service writer or manager which of their service marketing efforts are working the best. I find that their responses are typically based on that month’s coupon redemptions. This type of visual performance tracking of service marketing is a recipe for wasted marketing dollars.

Throughout this series I have been touting the benefits of customer segmentation and the positive effect it can have on your marketing efforts. Think about looking at each group before you commit to any marketing campaigns, regardless of the content. It is so important to determine ahead of time which groups will receive the message based upon their past performance. How many times do we send, at our expense, communications to customers that either live too far from the dealership, or don’t have the vehicle anymore? This type of marketing is almost guaranteed to get no response, yet it is such a common practice in our industry. I see it almost every time I step into a dealership. Insist that your marketing group, regardless of if internal or a third party, is responsible for marketing the correct message to the correct group. It has been proven over and over again in almost every type of business that smaller, highly target messaging will create a much better response than any unrelated mass approach.

As I mentioned in part two of this series, many DMS providers make it difficult for dealers to download their customer database. In some cases, it’s because there are control issues arising between dealers and their DMS (or CRM) as to who actually owns this data. Another issue can be that a provider fears their dealers will take the data and switch companies. Any dealership’s database of customer transactions should be treated as pure gold and it would be a catastrophe to lose this data when a change of providers occurs. Dealers would be wise to develop a business case surrounding their data. It is important to understand how vital it is to clean up this data. The time involved in so doing will actually save money by increasing the effectiveness of any marketing.

Most providers have tools built into their system that can be used to access and download this data. All big DMS providers have report writers or generator functions with which a dealer can download sets of users. Dealers can use this to generate reports on sets of customers and can use these reports to start the process in bite size chunks instead of trying to tackle their entire database all at once. In choosing whether to do this from your DMS or CRM, I would start with your DMS data. Both are important to clean. But your DMS data is the most prominent. This database is huge and can be mined more effectively. It contains all the long-term customers from which continuous revenue can be generated.

If a dealership does not have anyone with the proper skillset to accomplish this, there are third party companies such as Authenticon and StoneEagle that can assist. These companies have built workarounds with which they can use to access a dealership’s data, even from the most difficult providers.

The following is a good road map to use to clean up the dealership’s database.

1. Look for duplicates. Just about every DMS has a report generator that allows a dealer to export these files into an Excel format. In this format, it becomes relatively simple to sort fields and identify duplicate entries. Look for duplicated names, phone numbers, and addresses and attempt to consolidate these duplications into a single record. Start with the oldest records and work backwards to the present. Once one group is cleaned up, proceed to the next group. This makes the task a little more manageable.

2. Once the database is consolidated and duplicates removed, there are then two steps that should be done with two different USPS database services to ensure 100% address accuracy. It is important to get the sequence correct as follows:

a)    First run the entire database through the USPS’ National Change of Address database (NCOA). This can be done directly with the post office using their NCOAlink System, or through third party suppliers such as Melissa Data. They will return the database with current mailing addresses.

b)    After running the database through NCOA, then take the entire database and run it through another U.S. Postal Service database called ACS™ Service. Many DMS databases have a portion of address correct. Such as the address is 120 West Main Street, and the DMS has it as 120 Main Street; omitting the West from the address.  NCOA updates the address and then ACS fixes such inaccuracies as this. So it is important to do both, one after the other.

 Here is a link to the post office program for both of these:  https://www.usps.com/business/move-update.htm

3. Once all of this has been done, import the updated database into the DMS or CRM.

4. Then move onto email addresses. There are a number of independent services that can verify the validity of an e-mail address and acquire any that are missing from the database. These services can be used to fill in the blanks. Once this is done, then look for any that are still missing and have an admin call the customers to get updated information. Once this is accomplished, enter these changes into the DMS or CRM.

Whether the dealership chooses to do this internally, or to outsource to another company, usually depends on how messed up the database is, and the scope of work required. In some cases the database is not a huge task to clean up and dealers can do a very effective job themselves. Some, however, are so messed up that the task becomes overwhelming and it is better to seek outside help.

This problem starts from the top and goes down. It’s industry-wide and not just confined to dealerships. At PLG we once worked with an OEM who sent us a database of all dealerships and a list of their salespeople. This was a current list and yet we found that half of the salespeople weren’t even employed at the dealerships anymore. The tragedy in all this is that there is so much upside to knowing this data and having it clean. Look at grocery stores. They know what cat food you buy and use it to cross-market. If you’re a loyal Purina cat food customer and all of a sudden you start buying a new brand, I bet you that the cash register spits out a coupon for Purina cat food.

Dealerships have the ability to do this as well. If a customer has changed their oil with you for 6 years and all of a sudden stops coming in, you can encourage them to come back in with a relevant offer tailored specifically to that customer. This type of offer has proven time and again to be highly effective. The point is to have this customer data readily available and then use it to correctly target customers. However, most dealers aren’t doing this. I still get service reminders for vehicles I haven’t owned in 8 or 9 years. I recently bought a new vehicle and 2 weeks later I received an offer in the mail for new tires! It’s a new vehicle. Why would I need new tires? Sending irrelevant messages to your customers only alienates them and makes them less open to receiving and paying attention to future communications from you.

In part four of this series, we’ll explore what to do with the data after a dealer has obtained it and cleaned it up.

As I mentioned in part two of this series, many DMS providers make it difficult for dealers to download their customer database. In some cases, it’s because there are control issues arising between dealers and their DMS (or CRM) as to who actually owns this data. Another issue can be that a provider fears their dealers will take the data and switch companies. Any dealership’s database of customer transactions should be treated as pure gold and it would be a catastrophe to lose this data when a change of providers occurs. Dealers would be wise to develop a business case surrounding their data. It is important to understand how vital it is to clean up this data. The time involved in so doing will actually save money by increasing the effectiveness of any marketing.

Most providers have tools built into their system that can be used to access and download this data. All big DMS providers have report writers or generator functions with which a dealer can download sets of users. Dealers can use this to generate reports on sets of customers and can use these reports to start the process in bite size chunks instead of trying to tackle their entire database all at once. In choosing whether to do this from your DMS or CRM, I would start with your DMS data. Both are important to clean. But your DMS data is the most prominent. This database is huge and can be mined more effectively. It contains all the long-term customers from which continuous revenue can be generated.

If a dealership does not have anyone with the proper skillset to accomplish this, there are third party companies such as Authenticon and StoneEagle that can assist. These companies have built workarounds with which they can use to access a dealership’s data, even from the most difficult providers.

The following is a good road map to use to clean up the dealership’s database.

1. Look for duplicates. Just about every DMS has a report generator that allows a dealer to export these files into an Excel format. In this format, it becomes relatively simple to sort fields and identify duplicate entries. Look for duplicated names, phone numbers, and addresses and attempt to consolidate these duplications into a single record. Start with the oldest records and work backwards to the present. Once one group is cleaned up, proceed to the next group. This makes the task a little more manageable.

2. Once the database is consolidated and duplicates removed, there are then two steps that should be done with two different USPS database services to ensure 100% address accuracy. It is important to get the sequence correct as follows:

a)    First run the entire database through the USPS’ National Change of Address database (NCOA). This can be done directly with the post office using their NCOAlink System, or through third party suppliers such as Melissa Data. They will return the database with current mailing addresses.

b)    After running the database through NCOA, then take the entire database and run it through another U.S. Postal Service database called ACS™ Service. Many DMS databases have a portion of address correct. Such as the address is 120 West Main Street, and the DMS has it as 120 Main Street; omitting the West from the address.  NCOA updates the address and then ACS fixes such inaccuracies as this. So it is important to do both, one after the other.

 Here is a link to the post office program for both of these:  https://www.usps.com/business/move-update.htm

3. Once all of this has been done, import the updated database into the DMS or CRM.

4. Then move onto email addresses. There are a number of independent services that can verify the validity of an e-mail address and acquire any that are missing from the database. These services can be used to fill in the blanks. Once this is done, then look for any that are still missing and have an admin call the customers to get updated information. Once this is accomplished, enter these changes into the DMS or CRM.

Whether the dealership chooses to do this internally, or to outsource to another company, usually depends on how messed up the database is, and the scope of work required. In some cases the database is not a huge task to clean up and dealers can do a very effective job themselves. Some, however, are so messed up that the task becomes overwhelming and it is better to seek outside help.

This problem starts from the top and goes down. It’s industry-wide and not just confined to dealerships. At PLG we once worked with an OEM who sent us a database of all dealerships and a list of their salespeople. This was a current list and yet we found that half of the salespeople weren’t even employed at the dealerships anymore. The tragedy in all this is that there is so much upside to knowing this data and having it clean. Look at grocery stores. They know what cat food you buy and use it to cross-market. If you’re a loyal Purina cat food customer and all of a sudden you start buying a new brand, I bet you that the cash register spits out a coupon for Purina cat food.

Dealerships have the ability to do this as well. If a customer has changed their oil with you for 6 years and all of a sudden stops coming in, you can encourage them to come back in with a relevant offer tailored specifically to that customer. This type of offer has proven time and again to be highly effective. The point is to have this customer data readily available and then use it to correctly target customers. However, most dealers aren’t doing this. I still get service reminders for vehicles I haven’t owned in 8 or 9 years. I recently bought a new vehicle and 2 weeks later I received an offer in the mail for new tires! It’s a new vehicle. Why would I need new tires? Sending irrelevant messages to your customers only alienates them and makes them less open to receiving and paying attention to future communications from you.

In part four of this series, we’ll explore what to do with the data after a dealer has obtained it and cleaned it up.

In part one of this series, I discussed the importance of dealerships using their data effectively in marketing and how, when done properly, it can increase vehicle and service sales while improving customer loyalty. Now I’d like to discuss why a great majority of dealers aren’t already using their data to its full potential. I can’t think of another business today that is as antiquated as we are in the automotive business when it comes to truly understanding our customers purchase habits and buying preferences.  That’s primarily because we don’t take the time and make the effort to understand them, even though we have the data right at our fingertips.

The principal reason that many dealers aren’t using their data correctly is a lack of understanding about exactly what data they have, how to access it, and how to segregate it into valuable subsets of customers. Most dealers realize and understand that data mining can be an important asset and do use it in some very broad, general ways. It is most frequently used for following up with orphan owners and customers coming off-lease. While this is certainly a start, there are surely many more practical and effective ways to use the data. The underlining issue always seems to be a lack dealership knowledge as to how to get the data, segment it and then market it properly to the correct audience.

The big DMS providers like Reynolds and ADP certainly don’t make this process easy for dealers. In-fact they have implemented changes that actually make it harder for a dealer to effectively use their own customer data, especially if the dealer chooses to enlist the help of a third party marketer. There have been numerous public conflicts between dealers and their DMS providers regarding who actually owns the dealerships customer and transaction data, and just as importantly, who should have access to it. Despite the hurdles you might encounter with your DMS provider, it is well worth the effort to familiarize yourself with the process for extracting and marketing to these very valuable customers. If you don’t currently have an ongoing business practice in place for this you should add it to the top of your to-do-list.

Getting the data is one thing. But another challenge is that your data is only as good as the information that was put into the system by your employees. If customer data isn’t collected with diligence and accuracy every time a customer visits your store, you are missing a significant opportunity to learn more about that customers contact information and buying preferences. Do you have a process in place that every service writer asks the customer if their email or mailing address has changed?  A recent survey of over 100 individual service departments indicated that only 6% routinely asked for updated customer contact information. The most recent US Census indicated that approximately 36 million Americans changed physical addresses last year. At a 6% update rate, dealers missed out on 34 million new customer contact points, just last year alone. Add in the number of email address and phone number changes and the total number of outdated customer contact records in dealers systems is staggering.

Compounding these issues, many dealerships don’t police how data is entered into their system and end up with multiple entries for the same customer. Not only does this make it more difficult to accurately track the customer’s transactional history, it also does a disservice to the customer, as the dealer will thus be frustrated in the effort to provide accurate detailed service records or tie the purchase of the vehicle to its entire service history.

There are many points along the way in which a customer can be duplicated. They can be entered multiple times in the CRM during the sales process. For example, if handled by multiple salespeople, or if the original record was in one person’s name, but the actual sale happened in another person’s. They could be entered as different customers if the husband brings a vehicle in for service on one occasion, and the wife brings the vehicle in a separate time. It’s even possible that a customer makes a purchase within the parts department and is then entered another time. Many dealerships work with CRM companies that create a database on top of the DMS that serves to further increase duplication.

Dealerships should have a strong business policy in place regarding their data and implement best practices for the collection of good, clean data, including full information on every customer contained in a single record. It would be wise to verify with each customer at every touch point that the information contained in their system is accurate, complete and current. Mandate that each customer has a single customer ID and that every transaction is recorded within that ID. Invest the time into cleaning up your CRM and DMS, with the ultimate goal of having identical databases with the cleanest data possible. This is an ongoing process that should be policed consistently. Unfortunately, many dealerships don’t have anyone tasked with marketing that has the right skill set to effectively accomplish this.

In my next blog, part three of this series, I will talk about how to get your data then clean it up so that it can be used effectively in target marketing.

In part one of this series, I discussed the importance of dealerships using their data effectively in marketing and how, when done properly, it can increase vehicle and service sales while improving customer loyalty. Now I’d like to discuss why a great majority of dealers aren’t already using their data to its full potential. I can’t think of another business today that is as antiquated as we are in the automotive business when it comes to truly understanding our customers purchase habits and buying preferences.  That’s primarily because we don’t take the time and make the effort to understand them, even though we have the data right at our fingertips.

The principal reason that many dealers aren’t using their data correctly is a lack of understanding about exactly what data they have, how to access it, and how to segregate it into valuable subsets of customers. Most dealers realize and understand that data mining can be an important asset and do use it in some very broad, general ways. It is most frequently used for following up with orphan owners and customers coming off-lease. While this is certainly a start, there are surely many more practical and effective ways to use the data. The underlining issue always seems to be a lack dealership knowledge as to how to get the data, segment it and then market it properly to the correct audience.

The big DMS providers like Reynolds and ADP certainly don’t make this process easy for dealers. In-fact they have implemented changes that actually make it harder for a dealer to effectively use their own customer data, especially if the dealer chooses to enlist the help of a third party marketer. There have been numerous public conflicts between dealers and their DMS providers regarding who actually owns the dealerships customer and transaction data, and just as importantly, who should have access to it. Despite the hurdles you might encounter with your DMS provider, it is well worth the effort to familiarize yourself with the process for extracting and marketing to these very valuable customers. If you don’t currently have an ongoing business practice in place for this you should add it to the top of your to-do-list.

Getting the data is one thing. But another challenge is that your data is only as good as the information that was put into the system by your employees. If customer data isn’t collected with diligence and accuracy every time a customer visits your store, you are missing a significant opportunity to learn more about that customers contact information and buying preferences. Do you have a process in place that every service writer asks the customer if their email or mailing address has changed?  A recent survey of over 100 individual service departments indicated that only 6% routinely asked for updated customer contact information. The most recent US Census indicated that approximately 36 million Americans changed physical addresses last year. At a 6% update rate, dealers missed out on 34 million new customer contact points, just last year alone. Add in the number of email address and phone number changes and the total number of outdated customer contact records in dealers systems is staggering.

Compounding these issues, many dealerships don’t police how data is entered into their system and end up with multiple entries for the same customer. Not only does this make it more difficult to accurately track the customer’s transactional history, it also does a disservice to the customer, as the dealer will thus be frustrated in the effort to provide accurate detailed service records or tie the purchase of the vehicle to its entire service history.

There are many points along the way in which a customer can be duplicated. They can be entered multiple times in the CRM during the sales process. For example, if handled by multiple salespeople, or if the original record was in one person’s name, but the actual sale happened in another person’s. They could be entered as different customers if the husband brings a vehicle in for service on one occasion, and the wife brings the vehicle in a separate time. It’s even possible that a customer makes a purchase within the parts department and is then entered another time. Many dealerships work with CRM companies that create a database on top of the DMS that serves to further increase duplication.

Dealerships should have a strong business policy in place regarding their data and implement best practices for the collection of good, clean data, including full information on every customer contained in a single record. It would be wise to verify with each customer at every touch point that the information contained in their system is accurate, complete and current. Mandate that each customer has a single customer ID and that every transaction is recorded within that ID. Invest the time into cleaning up your CRM and DMS, with the ultimate goal of having identical databases with the cleanest data possible. This is an ongoing process that should be policed consistently. Unfortunately, many dealerships don’t have anyone tasked with marketing that has the right skill set to effectively accomplish this.

In my next blog, part three of this series, I will talk about how to get your data then clean it up so that it can be used effectively in target marketing.