Auto dealers are swimming in data. But for many, it’s a wave they can not catch.
At least that is the takeaway from Cox Automotive’s 2024 Power of Data study as dealers reported they are struggle to extract actionable insights from the data they know can be a powerful tool.
Bu for those franchise dealers and their management using their data most heavily, they see a higher positive impact on business results.
“We wanted to better understand how dealers use and value data to identify areas it can be optimized,” stated Chase Abbott, VP of Sales at Cox Automotive, in a press statement with the report. “We found that seven out of 10 dealers say lags in data make their insights less useful.”
Dealers Unsure About Using Data
To that end, 83 percent of dealerships have access to data insights from a dashboard or reporting tool, less than one-third are satisfied with the insights they get from vendors.
Dealers currently employ a mix of strategies (in-house and with partners), but there is no consensus of best practices in obtaining data and then making it actionable. Their remains an opportunity to maximize the data and insights available to them, according to the study.
Additionally, most dealers have concerns about ensuring data privacy and compliance. Despite dealership-wide understanding of policies and their importance, many are hesitant to push forward due to their fears.
Key Survey Results
Other takeaways from the study were:
- 54 percent of dealers have experienced conflicting data across multiple sources, making it difficult to determine which data is accurate;
- 69 percent of dealers are likely to stop using a vendor if they cannot provide reliable access to customer or lead data;
- 66 percent of dealerships are concerned about ensuring data privacy and compliance when adopting new tools; and
- 44 percent have held off adopting new data solutions or tools due to fears about data privacy issues or non-compliance.
Abbott noted that with more than half experience conflicting data across multiple sources its “diminishes dealers’ confidence and often means they are less likely to use data effectively and may miss opportunities to improve efficiency and the overall customer experience.”
Heavy Data Users
The survey found best practices among heavy data users was to combat data lag by implementing tools that update in real time and keep every department—marketing, sales, fixed ops and the back office—in sync with shoppers at every step.
“With challenge comes opportunity, and an omnichannel approach proves to be the best strategy dealers can take to truly capitalize on the power of data,” Abbott added.
The use of AI-powered automation to determine the data drives action that can eliminate the guess work and restore confidence with dealers, according to Cox officials. Predictive insights can help dealers overcome third-party data quality concerns.
Reviewing Vendors
“As dealers explore using data for their current and future needs, AI has proven to and will continue to have a profound impact on dealer and buyer connections,” said Abbott. “AI can pull data and insights together to provide a new level of intelligence and analytics the industry hasn’t seen before.”
An audit of their vendors can help dealers, and their staff, prioritize which shoppers to follow up with next. This audit should include how many shoppers are covered by their data set, how frequently data is updated, and how quickly it gets translated into insights in dealership systems.
“Data is worth doing right. With high quality, accurate, and secure data delivered in real time, dealers can unlock powerful insights that improve customer satisfaction, employee satisfaction, and profits,” Abbott concluded.
