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Building Long-Term Value with CDPs: the Ultimate Road Trip

  • Demetrios Tzortzis

    Demetrios Tzortzis

    Director, Automotive Consulting & Strategy

Created at October 5th, 2022

Building Long-Term Value with CDPs: the Ultimate Road Trip

It’s been well known for years that people aren’t particularly fond of the “automobile buying journey.” In 2014, Edmunds, the automotive website, conducted an interesting survey of 1,000 Americans – and 33% of them said they’d rather do their tax return than buy a car. Most said buying a vehicle was more stressful than getting married. Can you believe that? 1

For years, OEMs and auto dealerships have worked tirelessly to make the experience between the car buyer and auto dealer a smooth, simple and quality experience, both online and offline. As if the stakes weren’t already high, the global COVID-19 pandemic accelerated digital transformation for dealers, with car buyers looking to connect with them through any channel, seamlessly, on their terms. Today, dealerships are trading in traditionally transactional relationships with customers for lifetime retention in both sales and service. This is a long-term relationship strengthened by personalized messaging and timely offers through the most relevant channels for each and every customer.

Perhaps more than companies in most industries, auto dealerships must have a highly detailed understanding of their customers. After all, a car purchase is deeply personal and one of people’s largest expenses. Some may say, “a vehicle is a mechanical reflection of self.” So, understanding the unique connection between the driver and automobile starts with understanding customers’ core needs (i.e., family, adventure, RV, boating, cost savings, fuel type, etc.). This includes those intrinsic things such as what motivates, intrigues, and captivates customers.

The challenge is building and maintaining trust. Launch an email with a misspelled name, and you lose trust. Suggest a four-door sedan to an outdoor enthusiast, and you lose trust. Fail to offer a loyalty rebate to a longtime customer, and you lose trust.

More and more, dealerships are building trust through strategic initiatives that go beyond transactional relationship to build a more experiential and flexible relationship with each customer, in a personal and unique manner. This is where a customer data platform (CDP) may come into play. If you have not yet been exposed to the term CDP, it’s a packaged software solution that helps auto dealers (and companies in other industries) solve a huge and growing problem: the need to unify known and unknown people’s profiles across all data sources into a single record that can be used to activate across all channels, both online and offline to create a personalized experience using a combination of first-party and third-party data to inform decisions. And with the shift to first-party data affecting every brand and industry, the value of CDPs is on the rise.

So, what separates a good CDP from an exceptional CDP? Aside from some of the technical details, it comes down to data quality and a solid data management strategy. Dealerships are long-practiced at collecting first-party data. However, most dealer data is dirtier than a kitchen sponge. The challenge is ensuring the data is clean, that multiple customer records are consolidated, and contact details are accurate and up to date, so they can be leveraged to the highest efficiency.

For example, what’s the difference between John Anderson of Dallas and Jon Anderson of Dallas? Both appear in your database. Is he the father of three who runs a small business? Or is he the weekend rock climber who only buys his cars used? Is he a loyal customer? Is he even the same guy?

Getting this correct is essential. First, establishing John/Jon’s real identity is crucial. Secondly, building an understanding of his needs and interests is vital to creating relevant messaging. Finally, communicating through the most relevant channels of John/Jon’s life assures he receives the right information so he can make an intelligent car-buying decision.

For auto dealers that hope to thrive for decades to come, a CDP that is both well managed and fueled by the highest-quality data achieves this deep layer of understanding by helping the dealer adapt to technologies that provide a seamless experience for both customers and dealers. Think of a CDP as a high-performance car – it operates much smoother with high-octane gasoline and with a seasoned driver behind the wheel. CDPs help dealers get from Point A to Point B without a wrong turn that can fracture trust between the dealer and its customers.

Investing in a CDP and strategy is a good start to building customer lifetime value. But it is critical to focus intently on the data being fed into it. The difference in results can be dramatic.