Your Data Matters

Your Data Matters

Customer Data Management: Your Questions Answered

As a dealer, you may not realize that the data you collect during every transaction holds incredible value.

 

Information such as a customer’s name, address, email, phone number, VIN, and purchase price provides a treasure trove of insight into that individual as a consumer and allows direct communication with them for continued engagement.

 

With attentive management of this data, you have an opportunity to gain control over revenue centers that are already inside your dealership but may not be leveraged to their full potential. 

 

We understand your first reaction may be “isn’t this a violation of my customers privacy?” The answer is no. There is a significant difference between selling customer data and monetizing it through your own marketing efforts.

In fact, there is a vast industry of third-party entities that are already making use of the very data you collect. On a daily basis, you are handing this information over – to the DMV, for example – and setting off a chain reaction in which that customer information is used, perhaps without your knowledge, for financial gain. That revenue stream, built on data that originates from your DMS, excludes you entirely.


Can you take back control of this revenue opportunity without harming your customer relationships or risking privacy violations? Yes. The dealer-branded marketing programs offered by servicecontract.com follow strict legal compliance that protects both your customers and your business. Please contact us with any additional questions or concerns you don’t see addressed here. Read on for answers to frequently asked questions. 

FAQs

According to a nationwide research report, U.S. marketers and other users spent more than $11 billion on third-party audience data in 2019. The companies that buy information include insurers, car-rental agencies, address-registry and consumer-report publications, banks, auto parts suppliers, and car dealers. In some states, buyers may also include private investigators, security companies, commercial data brokers, collection agencies, private billing companies, targeted advertising firms, and bulk marketers.

One surprising source for some of these data sales: Departments of Motor Vehicles in many states. Reporting has revealed that DMV revenues in the millions have been generated by selling drivers’ personal information. When you supply your required customer data following a sale, you are unknowingly feeding that revenue source and, in turn, the profits generated for the entities that purchase your data. One example of how that data may be used is by competitors who employ marketing tactics to invade your PMA and sell vehicles outside of it to your customers, in addition to extended service contracts.

Not every customer purchases service contract or other F&I product at the point of sale. By partnering with a reliable service provider, you can generate a branded marketing program that gives you a second chance to tap into the lucrative aftermarket by leveraging the concrete data you already have — the customer information generated by every vehicle saleAnd the pipeline of vehicles eligible for post-sale Vehicle Service Contracts replenishes continually as factory warranties expire. 

Successful sales of service contracts through your dealership offer your existing customers an opportunity to access valuable savings, and brings business right back into your service center, closing the loop on your positive customer relationship. Leveraging your customer data for the purpose of capturing these opportunities allows you to capitalize on a segment of the market that already outpaces the new and used vehicle sales channels. 

You certainly have a legal obligation to protect your customers’ data through stringent security measures. As noted in the DMV example above, there is data you are required to share to complete a sale transaction. This is different from making use of the data for your own marketing purposes which are not likely prohibited as it does not entail selling that data to a third party.  

Privacy agreements vary greatly state by state. We encourage you to review your own contract language very carefully to understand what information your customers are giving you permission to collect, store, and share. Then analyze your state’s consumer-privacy laws to understand your compliance risk. A reputable service provider should offer compliance guidance specific to your business location(s). 

Selling data is exactly as stated: purposely providing customer information to a third party in exchange for financial compensation.  

Monetizing data differs in that you are making use of customer information for a purpose such as direct marketing, not sharing, or exposing customer information to any third party for its own use. 

In the case of partnering with servicecontract.com, your customer data is used only with your permission and only for the purposes of marketing to those customers under your brand name. The goal is to extend your sales opportunities and to provide protective services to your customers, without additional burden to your service writers. 

You have an important role to play in protecting your customers’ information. Those customers are relying on you to vet out the technology and the relationships you are implementing to house and share their data. 

As a starting point, you must be familiar with the level of security inside the databases you are subscribing to. Ensure that your vendors guarantee the safeguarding of your data and ultimately will hold you harmless should they experience a breach that is no fault of yours. 

When engaging a service provider with whom you will be sharing data, make sure they have a solid reputation, that you fully understand the legal agreement you are entering, and that you are aware of the exact terms of data use you are agreeing to. A reliable vendor should have your legal rights at the very top of their list of concerns. Ultimately, you should ensure that that your legal liability is protected as well as your customer relationship. 

As in any relationship built on trusttransparency is keyCarefully review the legal fine print of the agreement you ask your customers to sign at the point of sale. Very often the language pertaining to data security references where data is being stored and its protection from access by unknown third parties but does not necessarily refer to the fact that the data can be shared knowingly or willingly for marketing purposes.  

If you prefer to amend the language in the contract, you can do so. Or you can provide written or verbal notice to customers of your intent to continue providing them additional protectionproduct purchase opportunities post-sale. Note that email campaigns sent to customers under your branding will always include an unsubscribe option. 

When considering any vendor relationship that involves the sharing of data, it is critical that you vet the reputation and protective measures a vendor brings to the relationship. As a first step, confirm the vendor has a privacy policy in place and that it is available for your review. Those privacy guidelines should include clear terms of use and a strong data storage policy that ensures encryption.  

It is also good practice to review a vendor’s reputation through Better Business Bureau (BBB) or other rating guides. As important as their rating is your ability to hold a vendor accountable if data misuse does occur. Always protect yourself by putting proper legal parameters in place. 

Familiarize yourself with their process in the instance of a data breach. Before entering into a legal agreement, be sure the data you are committing to provide will be held separately from any general data pool and will remain protected throughout the life of the agreement, holding you blameless in the event of a security failure.  

FAQs

How is customer data that we collect at point-of-sale being used (and profited from) by third parties? 

According to a nationwide research report, U.S. marketers and other users spent more than $11 billion on third-party audience data in 2019. The companies that buy information include insurers, car-rental agencies, address-registry, and consumer-report publications, banksauto parts suppliers, and car dealers. In some states, buyers may also include private investigators, security companies, commercial data brokers, collection agencies, private billing companies, targeted advertising firms, and bulk marketers.  

One surprising source for some of these data sales: Departments of Motor Vehicles in many states. Reporting has revealed that DMV revenues in the millions have been generated by selling drivers’ personal information. When you supply your required customer data following a sale, you are unknowingly feeding that revenue source and, in turn, the profits generated for the entities that purchase your data. One example of how that data may be used is by competitors who employ marketing tactics to invade your PMA and sell vehicles outside of it to your customers, in addition to extended service contracts. 

How can I leverage my customer data to increase revenue? 

Not every customer purchases service contract or other F&I product at the point of sale. By partnering with a reliable service provider, you can generate a branded marketing program that gives you a second chance to tap into the lucrative aftermarket by leveraging the concrete data you already have — the customer information generated by every vehicle saleAnd the pipeline of vehicles eligible for post-sale Vehicle Service Contracts replenishes continually as factory warranties expire. 

Successful sales of service contracts through your dealership offer your existing customers an opportunity to access valuable savings, and brings business right back into your service center, closing the loop on your positive customer relationship. Leveraging your customer data for the purpose of capturing these opportunities allows you to capitalize on a segment of the market that already outpaces the new and used vehicle sales channels. 

Don’t privacy agreements prevent me from using or sharing the customer data we collect?  

You certainly have a legal obligation to protect your customers’ data through stringent security measures. As noted in the DMV example above, there is data you are required to share to complete a sale transaction. This is different from making use of the data for your own marketing purposes which are not likely prohibited as it does not entail selling that data to a third party.  

Privacy agreements vary greatly state by state. We encourage you to review your own contract language very carefully to understand what information your customers are giving you permission to collect, store, and share. Then analyze your state’s consumer-privacy laws to understand your compliance risk. A reputable service provider should offer compliance guidance specific to your business location(s). 

What is the difference between selling and monetizing customer data?  

Selling data is exactly as stated: purposely providing customer information to a third party in exchange for financial compensation.  

Monetizing data differs in that you are making use of customer information for a purpose such as direct marketing, not sharing, or exposing customer information to any third party for its own use. 

In the case of partnering with servicecontract.com, your customer data is used only with your permission and only for the purposes of marketing to those customers under your brand name. The goal is to extend your sales opportunities and to provide protective services to your customers, without additional burden to your service writers. 

How can we protect ourselves from liability when using an automated marketing program? 

You have an important role to play in protecting your customers’ information. Those customers are relying on you to vet out the technology and the relationships you are implementing to house and share their data. 

As a starting point, you must be familiar with the level of security inside the databases you are subscribing to. Ensure that your vendors guarantee the safeguarding of your data and ultimately will hold you harmless should they experience a breach that is no fault of yours. 

When engaging a service provider with whom you will be sharing data, make sure they have a solid reputation, that you fully understand the legal agreement you are entering, and that you are aware of the exact terms of data use you are agreeing to. A reliable vendor should have your legal rights at the very top of their list of concerns. Ultimately, you should ensure that that your legal liability is protected as well as your customer relationship. 

What do I need to tell my customers about their data being shared?  

As in any relationship built on trusttransparency is keyCarefully review the legal fine print of the agreement you ask your customers to sign at the point of sale. Very often the language pertaining to data security references where data is being stored and its protection from access by unknown third parties but does not necessarily refer to the fact that the data can be shared knowingly or willingly for marketing purposes.  

If you prefer to amend the language in the contract, you can do so. Or you can provide written or verbal notice to customers of your intent to continue providing them additional protectionproduct purchase opportunities post-sale. Note that email campaigns sent to customers under your branding will always include an unsubscribe option. 

How can I make sure the vendors that access my customer data are reputable? 

[Can I get help on the answer to this one? BBB rating? Other resources for evaluating a vendor?]