CDP Projects Will Expose The Ugly Truth: Few Automotive APIs Really Exist

I've been writing about the rise in interest to create Customer Data Platforms (CDP) within automotive dealer groups. A few brave leaders have decided that their customer data was worth managing so that the right messages, with the right cadence, could be delivered using the most optimal medium (MCM) to increase the lifetime value of each customer.

Look for an initial Automotive CDP comparison report in Q1 of 2023

There are some unique challenges in building an automotive specific CDP. Dealer groups are considering their options: build vs. lease. They are also evaluating CDP startups based on their scalable experience with data hygiene, cloud security, data appending, marketing automation, reporting, and integrations with their preferred software partners.

Complicating matters is that there is limited independent research on what each Automotive CDP platform actually can achieve. I will be filling this gap with additional articles, research, and conference workshops next year.

"Automotive APIs Suck" - anonymous

Dealers who have embarked down the CDP path have come to the hard realization that many of their software tools were built with outdated technology. Their retail sales tools are build on frameworks which never envisioned bi-direction updates from other software platforms. Fearful of competition, automotive retail systems were built in silos with toll gates.

The lack of robust APIs will bring accelerated losses to some very large software companies that serve auto dealers in 2023.

Consider this. Many of the automotive CRM platforms that dealers use in the U.S. have worthless Application Program Interfaces (API). I will not call out specific vendors but many CRM platforms still send out flat files for importing data because their API can't replicate the reports that their systems generate!

The Clock Is Ticking and Dealers Are Less Willing To Wait

In the past there were no real alternatives, but now there are choices (software with strong APIs) in and outside of automotive. Since CRM, chat, SMS, and telephony platforms are the primary channels that dealers use to communicate with their customers, dealers will start to migrate to platforms that can directly update their CDP, which will be the tipping point for product cancellations.

CDPs will expose the antiquated software used by dealers which if continued to be used, would limit the quality and quantity of updates in the CDP.

Yes, there are workarounds but they are clumsy and frankly embarrassing when you look at the data gymnastics needed to move data between systems.

CDPs Will Force Dealers To Think Differently About Their Customer Data

Imagine a world in which a call comes into the dealership's BDC and the customer books a service appointment. Minutes later the time of the call, the incoming phone number, the call transcript, and call outcome (service scheduled) was posted into the CDP after the call was transcribed by the telephony vendor. A new contact number is added to the CDP as a possible contact source for this customer and any active service marketing campaigns are paused.

Imagine a world that an existing customer comes in, without an appointment, and buys a car. The DMS updates the CDP that same day so that the customer record is updated and moved out of any sales mailing, calling, or social media campaigns. This saves the dealer marketing dollars and avoids the dealer's outreach from looking disconnected from their recent visit.

Imagine a world where the dealers digital retailing platform updates the CDP with the consumer's ANONYMOUS shopping activity, including that they were interested in leasing a specific vehicle. This triggers the CDP to place the customer into a sales follow-up campaign. The dealer calls the consumer and sets an appointment that same day.

Imagine a world where the dealership receives an email asking the sales staff to update their address and email on file. The sales agent updates the CRM and DMS. Because the DMS has a robust API, the CDP is also updated automatically with a change log record enter for later auditing. The old email address is still kept in the CDP so that matching algorithms can still connect historical communications.

Imagine world where chat messages, started on the dealership's website, not only update the CDP with the chat outcome (i.e. test drive scheduled) but also updates the CDP on the date, time of the website visit to feed potential AI analysis of their shopping session and to connect the chat session to a website tracking pixel data record.

When a CDP is mature, and contains many of the communication and shopping signals for each customer, efficient marketing and retention campaigns can be created.

Some of these CDP scenarios are happening today but many automotive specific platforms are proprietary, closed to competing integrations, and/or not able to be operated by dealership marketing teams because their were built as a marketing automation tool.

When Will CDP Projects Accelerate Past The Early Adopter Stage?

Jeff Williams , CEO of Absolute Results, asked me today what will be the tipping point for dealers to accelerate CDP investments. I believe it will only a take a few dealer groups sharing their savings on marketing investments, the increase in customer engagement, and increases in LTV across their entire customer portfolio. Jeff's company specializes in portfolio management and he clearly sees that CDPs will only accelerate his ability to provide actionable insights to the dealers that he serves today.

Portfolio management will become a required business strategy and the CDP will be at the heart of all efforts to increase LTV.

So, I would like to warn my friends in software organizations selling into dealerships that if your 2023 development budget does not include improving the stability and features of your APIs, you may want to reshuffle your priorities.

Dealership Managers Speak Up

Maybe some dealership marketing managers would like to chime in about their frustrations with APIs? Who has a really robust API? Let's start this discussion and look forward to more articles in this CDP series.

Don't forget that at the 2023 Digital Marketing Strategies Conference (DMSC) in Austin, we will be creating a CDP learning center and showcase of vendors with solutions that can help dealers with their portfolio management.