Customer data platform for automotive

A customer data platform (CDP) for automotive refers to the consolidation of data from various sources, resulting in a 360 view of each customer and shopper. This data can be used to tailor promotions, service reminders and appointment follow-ups. The automotive CDP differs from a traditional CDP because it is designed specifically to integrate with the auto dealership’s data technology ecosystem, such as customer relationship management (CRMs), DMS and chatbots.

The automotive industry as a whole is in a seismic shift toward software-defined vehicles (SDVs). A recent IBM Institute for Business Value survey of more than 1,200 global industry executives found 74% say that 2035 vehicles are going to be software-defined and AI-powered. It makes sense then that the internal software at auto manufacturers is integrated in a way that combines software and AI to enhance the customer experience.

A CDP for automotive seeks to eliminate dealers' data silos and consolidate data coming from multiple sources and vendors. Today's automotive customers expect a highly personalized and individual buying experience.

What this means for car manufacturers is a need for reinvigoration of their brand and a reinvention of the customer experience through data-driven decision making, as well as targeted marketing strategies.

CDP providers have an opportunity to seize the moment and work with the automotive industry, breaking down data silos and traditional marketing channels to meet the demands of today’s automotive customers.

A hyperpersonalized marketing approach is no longer an oddity. It’s expected. Customers expect a deeply personal and targeted approach throughout their customer journey. The path to creating this type of experience requires a customer data platform, or CDP, that is designed to collect, organize and manage customer data from various sources.

CDP software works to unify customer data, pulling from sources such as websites, mobile apps and CRM systems to provide a singular view of each customer and their activities. A CDP is used in all types of industries to help organizations manage their data and use it to make more informed marketing and inventory decisions.

While there are various CDP providers, the right CDP depends on what the needs of the dealership are and if the provider includes the capabilities needed. There are several key features that an automotive CDP must have in order to be functional. These features collectively empower automotive businesses to use customer data effectively, foster customer relationships and drive strategic decision-making.

1. API access: Provision of APIs for developers to build custom applications and integrations as needed.

2. Advanced segmentation: Tools for segmenting customers based on various attributes, behaviors and preferences, enabling targeted marketing strategies.

3. Data governance and privacy: Robust measures can help ensure data quality, security and compliance with privacy regulations like GDPR or CCPA.

4. Data ingestion: The ability to collect customer data from various sources such as websites, mobile apps, CRM systems, connected vehicles and IoT devices.

5. Data unification: The capability to merge and standardize data from different sources into a single, unified customer profile.

6. Integration capabilities: Seamless integration with existing marketing automation, CRM and other enterprise systems to help ensure smooth data flow and operation.

7. Personalization engine: Capabilities to deliver personalized experiences across channels, by using insights from the unified customer profiles.

8. Real-time data processing: The capacity to process and update customer profiles in real-time, helping ensure data accuracy and relevance.

9. Analytics and reporting: Built-in analytics tools and customizable reports to help understand customer behavior, measure campaign performance and derive actionable insights.

10. Scalability: The ability to handle growing volumes of data and accommodate expansion into new markets or product lines.

The primary goal of a CDP in this context is to create a unified, holistic view of each customer. This view enables automotive companies to offer personalized experiences, targeted marketing campaigns and data-driven insights.

With the number of dealerships available, it’s imperative to win over customers with benefits that transcend the classical driving experience. CDPs work to bridge the gap between CRM and marketing automation (MA) tools, such as Dealership Management Systems (DMS) and Original Equipment Manufacturers (OEMs).

Unlike traditional CRM systems, which are primarily designed for managing customer relationships in a sales context, CDPs provide a more comprehensive view of the customer journey across all touch points. They offer advanced audience segmentation capabilities that allow marketing teams to identify patterns, preferences and behaviors, therefore enabling more effective targeting and engagement.

Implementing a CDP successfully presents certain challenges. It needs a strategic business and technological assessment, clearly defined use cases and the establishment of new ways of working. Automotive companies must also integrate the CDP with their existing tech stack and develop effective roll-out strategies across different markets.

Furthermore, as the industry transitions toward SDVs, CDPs play a crucial role in managing and harnessing the vast amounts of data generated by these vehicles. SDVs, expected to dominate the market by 2035, are going to generate data not only from the vehicle itself, but also from its interaction with broader digital ecosystems¹.

Therefore, this data can be used to deliver tailored services, predictive maintenance and enhanced user experiences, becoming a critical aspect of future brand value.

A CDP can track a customer's interaction with a car manufacturer's website, mobile app, social media channels and even in-vehicle digital services. It can then use this data to create a detailed customer profile, capturing details like preferred vehicle types, service history and digital usage patterns.

The customer profiles can be segmented based on various criteria, such as demographics, purchase history and online interaction. When broken down into specific segments marketing teams can quickly identify shoppers who have shown interest in a specific make or model of a vehicle and target them with a special offer. This type of customization is expected of auto dealers and can increase customer engagement over time.

By using data from the platforms mentioned, automotive companies can reinvent their customer experiences, offering memorable in-vehicle digital experiences and enhancing overall brand loyalty. Auto dealers are going to use the CDP to launch marketing campaigns that increase customer satisfaction and build customer loyalty for the long term.

CDPs are transformative tools in the automotive industry, enabling businesses to use customer data effectively, enhance personalization and stay competitive in an increasingly digital and software-centric landscape. Despite the associated challenges, the potential benefits make CDPs indispensable for forward-thinking automotive companies².

It is important for auto dealers to keep monitoring how their CDP is working and continually making updates. Auto dealers must regularly review and refine CDP strategies based on performance metrics, customer feedback and industry trends.

CDPs offer businesses an opportunity to grow and optimize customer engagement in real-time. By analyzing customer data, automotive dealerships can quickly analyze data points including retention, conversion rates and customer retention.

By leveraging the depth and breadth of data collected, CDPs empower automotive companies to deliver highly personalized experiences. These service offerings could range from customized vehicle recommendations to personalized service offerings, fostering stronger customer relationships and loyalty.

With CDPs, businesses can consolidate customer data across various channels and pull from multiple data sources, like first-party data and third-party data. The software can streamline the automotive marketing experience and help dealerships deliver consistent messaging and personalized offers for their customers.

Through CDPs' data management feature, the dealership can track customer interactions at every stage of their customer journey. This data can include customer information, such as customer behavior, demographics, customer satisfaction and purchase history. Having all of these customer insights enables the dealership to identify the leads with the most potential, nurturing them with relevant content and offers to drive more conversions and greater profitability.

CDPs help a dealership understand individual customer preferences and purchase patterns, which can ultimately boost customer loyalty and lifetime value. With real-time data, dealerships can tailor service recommendations for individual customers and issue-specific loyalty programs at the right time.

The comprehensive data integrations offered by CDPs provide automotive companies with an immense amount of analytics and reporting capabilities. Ultimately, a data-driven approach to decision-making allows for improved functionality and operational efficiency, which can result in cost savings for the business.

CDPs amalgamate customer data from disparate sources into a single, comprehensive profile. This unified view allows automotive companies to understand their customers better, facilitating more personalized marketing efforts and improved customer experiences.

Selecting the right automotive CDP is a critical decision that can significantly influence a business's ability to understand and engage with your customers effectively. Here are some key considerations to guide the decision.

Assess the data sources and ensure that the CDP can ingest, unify and manage data from all relevant touchpoints. Car dealerships can retain customer data through websites, mobile apps, connected vehicles and third-party systems. A robust CDP should support both structured and unstructured data, ensuring no valuable customer insight is left behind.

Evaluate the platform's segmentation and personalization capabilities. Automotive customers expect personalized experiences, from vehicle recommendations to tailored service offerings. Ensure the chosen CDP offers advanced segmentation features and a strong personalization engine to meet these expectations. Given that car buyers can have unique characteristics, dividing customers into defined groups is going to be key for personalization down the road.

Data governance and privacy should be top priorities. Given the sensitive nature of automotive data, the CDP must adhere to stringent data security and privacy standards. Therefore, compliance with global regulations like GDPR and CCPA is advised.

Look for features such as data encryption, access controls and anonymization capabilities. A person’s car is a part of their everyday life and trusts the automotive dealership to be protective of their data and privacy.

A business’s CDP should be able to scale as a business grows and adapt to changing market conditions or new business initiatives. APIs for integration and customization are essential for this purpose. The automotive industry in particular must make adjustments with fluctuating market conditions and the constantly changing nature of part and inventory availability.

The CDP's analytics and reporting capabilities are crucial. They should provide actionable insights into customer behavior, campaign performance and market trends. Look for intuitive dashboards and customizable reports that align with business needs. The automotive industry in particular is complex and customer data can be spread across various systems heightening the need for a unified analytics hub.

Inspect the CDP vendors reputation, expertise and commitment to innovation in the automotive sector. A vendor with deep industry knowledge and a track record of successful implementations can provide valuable guidance and ensure that the CDP meets the dealership’s unique needs. Ensure that the vendor has experience with automotive customers and has dealt with data silos and fragmentation, commonly found within the automotive industry.

It includes licensing fees, implementation costs, ongoing maintenance and potential impact on existing systems. While cost shouldn't be the sole deciding factor, it's essential to choose a CDP that offers a good balance between functionality and affordability.

It’s likely that an automotive industry client requires extensive work sorting through customer data scattered across systems and vendors. Therefore, knowing the time and cost up front allows the dealership to be transparent with the CDP vendor.