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First-party data can be used to tailor marketing efforts to individual customers.

Shifting to a First-Party Data Marketing Strategy

New privacy laws and consumers' ability to block third-party tracking make it nearly impossible for auto retailers to leverage third-party data for their advertising. Dealerships now find themselves needing to pivot to first-party data strategies.

The conversation around first-party data versus third-party data has been active for the past few years. However, a large percentage of the automotive retail world is still trying to understand why third-party data is less viable, how to capitalize on first-party data effectively, and what it all means for retailers.

What Is First-Party Data?

When considering how auto retailers interact with their customers, a large percentage of customer insights (e.g., what the customer is interested in) has come from the use of third-party data. Whether it’s through cookies that track their online activity, affiliate networks, social media engagement or other sources, auto retailers have traditionally worked with their digital advertising partners to tap into data from outside sources to target consumers with their offers.

For years this was the backbone of search engine advertising and even social marketing on platforms such as Facebook. 

For example, a majority of auto retailers used information that was collected when consumers visited various websites – or when they made certain demographic information and preferences known on Facebook. Auto retailers would acquire these browsing details and use them in their targeting for personalized offers. However, new privacy laws have been implemented and companies are giving users the ability to block third-party tracking – making it nearly impossible for auto retailers to leverage third-party data for their advertising.

Like the rest of the e-commerce world, dealerships now find themselves needing to pivot to first-party data strategies. 

Creating a More Personalized Experience

First-party data is now essential to deliver more relevant and personalized marketing to digital-first consumers – and better understand and serve their needs. Consumers today are much more digital-centric in their behaviors than they were even just a few years ago, so the importance of understanding them cannot be understated. 

Furthermore, in today’s increasingly unpredictable business climate, delivering an even more personalized customer experience is a basic requirement your customers expect. Consumers gravitate toward dealerships that pay attention to and anticipate their specific wants and needs.

A dealership’s first-party customer data has the potential to be a treasure trove of audience insights that can be uniquely segmented to target customers with strategically customized messaging. Dealers can make use of this data to reach customers on any outbound marketing channel. For example, dealers can identify higher-mileage vehicles and offer those customers a special trade-in credit to get them into a new model.

“Don’t I already have this data in my current systems?”

If you have an idea about the importance of your first-party data and how to utilize it, one question remains: Where do you manage this invaluable information?
Your DMS or CRM may come to mind. However, in analyzing hundreds of these dealership data sources, we’ve found that they are filled with inaccurate and/or outdated customer information. At times, as many as 50% of those customer records were affected.

Using this unreliable customer data leads to a significant waste of your marketing spend, either from incorrect customer contact information or reaching out with irrelevant messages.

In addition, CRM systems do not typically offer the flexibility and customization dealers look for when creating audience segments for their marketing. A robust Customer Data Platform (CDP) can help you target customers more effectively and even automate the outreach, saving you time and effort. 

Capitalize on First-Party Data With a Customer Data Platform

To put your first-party data to work for you, a CRM or DMS isn’t the answer. A CDP is. A first-class CDP will:

  • Manage your customer data and create specific audiences you can target for marketing outreach.
  • Clean and append the data to ensure your customer records are accurate and up-to-date.
  • Securely store and encrypt your data when you transfer the information to a marketing platform or advertising channel, ensuring compliance with privacy regulations.

Aaron Sheeks head shot  (1) (002).pngCombining a CDP with a robust marketing platform allows you to put first-party data to work efficiently. You can then easily target customers with digital advertising, social media, email, direct mail or text – in addition to outreach lists for a BDC.

When dealers can clean and take action on their first-party data, it offers limitless marketing opportunities. It also leads to improvements in metrics such as costs per conversion and reductions in ad waste.

The future of automotive marketing will rely on ultra-targeted marketing with your secure first-party data. It’s going to be essential to compete in crowded markets. Dealers who start today are going to have a leg up on their competition.

Aaron Sheeks (pictured, above left) is president of PureCars, an Atlanta-based provider of digital marketing technology and services for automotive dealers.

TAGS: Retail
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