Data analytics leaves many dealers wary, confused, study finds

Most dealerships have vendor-provided data analytics at the ready designed to help them sell more cars, but few are satisfied with the information because of imperfections and conflicting results, according to Cox Automotive's 2024 Power of Data study.

That dynamic creates a missed opportunity to sell more cars, said Chase Abbott, Cox Automotive's vice president of sales.

"We found that seven out of 10 dealers say lags in data make their insights less useful and more than half experience conflicting data across multiple sources," Abbott said in a statement. "That diminishes dealer confidence and often means they are less likely to use data effectively and may miss opportunities to improve efficiency and the overall customer experience."

Cox Automotive's findings are based on two surveys. One involved 393 franchised dealers and took place from Dec. 8 to 20, 2023. The second targeted management at 191 franchised dealers from Jan. 3 to Feb. 11, 2024.

According to the report, 83 percent of respondents said they could tap data analysis or insights through reporting tools or a dashboard. On the other hand, 54 percent said they're getting conflicting data from multiple sources. Seventy percent said the lag in real-time customer lead and vehicle information made data-driven insights less useful.

The study also found that dealerships relying on data analysis tools and dashboards aren't impressed with the results.

Thirty-one percent of dealership staff said they had a neutral response to the data they received from these sources, and 24 percent were dissatisfied. Forty percent of dealership staff said they were neutral in terms of their confidence in the data received and 25 percent said they were not confident.

Dealers said they also worried about privacy when relying on data analysis tools and other products. Those concerns can limit use of data analysis designed to help dealerships, Cox said.

Roughly 66 percent of dealers said they are worried about ensuring data privacy and compliance, and 59 percent said they are concerned about ensuring data privacy compliance [with the Federal Trade Commission's Safeguards Rule] when using new tools. Tellingly, 44 percent said their dealerships have refrained from adopting new data analysis products and tools because they worried about privacy or noncompliance.

Cox Automotive released its survey with privacy concerns in the forefront after two cyberattacks struck CDK Global Inc. on June 19, leading to the shutdown of its dealership management system for more than 15,000 customers across North America.

While dealers' worries about data analysis tools limit their adoption and ideal use, Abbott said their concerns are also an opportunity.

"Data is worth doing right," Abbott said. "With high quality, accurate and secure data delivered in real time, dealers can unlock powerful insights that improve customer satisfaction, employee satisfaction and profits."