Auto dealerships are beginning to explore the use of customer data platform technology — a digital innovation that multiple industries have employed for years.
Better late than never, auto dealerships are starting to understand its potential to enhance customer interactions, said John Campos, automotive industry managing director at Acxiom, a data company focused on customer intelligence.
"We are seeing growing demand and interest," Campos told Automotive News. "It is really in that exploratory phase right now."
Designed to grab customer data from multiple sources, the software has the capacity to use it to personalize every customer interaction. It is an efficient alternative to Internet browser cookies, which are being phased out.
A customer data platform enables retailers to combine data collected from a customer relationship management platform with that taken from a data management platform and other sources, after which the technology streamlines how it all gets used, Campos said.
Group 1 Automotive, one of the nation's largest auto retailers, plans to use Acxiom's technology to enhance its marketing efforts. More deals are sure to follow, Campos said, but it could take a few years.
Campos spoke with Staff Reporter Mark Hollmer about why the technology matters and how retailers can embrace it. Here are edited excerpts.
On why a customer data platform is an improvement over other technology used to gather data
Traditionally, those different customer engagements were fragmented — you had one system communicating emails, another to communicate social messages. It helps by bringing them together into a single view because now you understand how is that customer engaging with me, through their shopping journey across different channels.
On why customer data platform technology matters
We are seeing a 30 percent reduction of duplicate customer data. What that means is that if you have me in your CRM and your DMS as multiple different individuals because I moved or used different email addresses, it's being able to link those together. It can equate to waste. When you're pulling that information for email marketing, social engagement or anything where you're paying per record, you're paying too much. This is going to help retailers eliminate that and truly understand who their customers are.
On why the auto retail industry has been slow to adopt the technology
My perception is they have their dealership management systems that give them coverage and they have gotten to a place where they didn't really need to adopt it. Now those retailers are really being driven by consumer expectations and the need has begun.
On the challenges auto retailers could face with these systems
Customer data platform is a modern technology designed to have more interoperability and more integration. There's definitely some legacy technology that we have within the industry and there can be challenges in that integration. Where we will see the most success is with those that are willing to integrate, willing to partner to meet overall industry needs.
On how the technology might become more widely adopted
It's really in demonstrating the return dealers are going to achieve and putting some real facts in front of them.
On what types of dealer conversations are taking place
Those who are most interested have created an organizational mindset that is customer-centric. Those who haven't tend to be more transactional, asking, "What can this technology do to help me drive more lifts?"
On how dealers got interested after avoiding the technology for so long
The pandemic accelerated digital retailing. Consumers' experience in other industries has begun to create more and more demand, with them saying, "I'm going to lean toward those retailers, those brands that I work with that give me the same type of digital experience that I receive from other industries." Demand has grown now, and automotive is paying attention.