With the news that third-party cookies will no longer be permitted in the very near future, marketing agencies have been spending a lot of time talking about the benefits of first-party data. With all of the hype surrounding this topic, there has been an influx of information about the use of first-party data in marketing, but not all of it is accurate or painting the whole picture. We are here to explain what first-party data is, how you already own it (whether you know it or not), and why most every dealership is not using this data to its full potential.
What is 1st Party Data?
First-party data is information that a company collects directly from their customers. This data is obtained from people who have previously interacted with the actual business itself and belongs solely to that business. First-party data is the only data that is 100% the property of the business that first obtained it. It is their responsibility to protect it. To learn more about the other types of data and how they differ, check out this blog. So where is all this information stored? First party data is managed by the software and systems that a company owns and uses such as a CRM and DMS.
CRM stands for Customer Relationship Management Software. Your CRM gathers customer interactions across all channels and places them in one easy to implement and use location. These three letters have become a lifeline for businesses everywhere, and not just for sales. Today, CRMs help businesses of all shapes and sizes to drive growth, profit, and customers. They also help to manage communication and relationships between team members, vendors, partners, and customers.
All the data that a CRM collects comes directly from the customers that interact with a business, meaning that this data falls in the first-party category. CRMs collect data from store visits, online interactions, and phone conversations then stores this collection of customers so employees can track and interact with it later. Carefully selecting people from this collection, based on certain criteria, turns them into an audience. These audiences become ideal for retargeting campaigns because since they have already interacted with your business, you have now captured their interests and can market to them accordingly. These first-party audiences are so valuable because not only can you see when they have visited your website, but a CRM can tell you what products a customer is interested in, when they became a customer, when the last car they bought was, when they are due for their next oil change, and so much more. Having all this data in one place allows a business to better manage enormous amounts of centralized information which leads to improving customer experience, satisfaction, retention, and service.
DMS stands for Dealer Management System. A DMS is software that provides dealers with some of the most effective tools that they need to run a successful business. A dealership’s inventory, customer management, payments, scheduling, and deal structuring are just some of the features that are managed in a standard DMS. Like a CRM, a DMS takes all this information and collects it in one easy to manage platform.
Although this data has more to do with the dealership itself than with customers, it is still data that belongs to dealership, therefore it is still first-party data and should be treated as such. A DMS can give you a clear, ground level insight into your dealership, from high level aspects to the most minor details, allowing you to fully understand your dealership operations and see the entire picture. This is ideal for spotting any issues AND for finding the solutions to those issues.
The DMS collects transactional data from customers who purchased or services a vehicle, which means that a DMS will have actual addresses, phone numbers and other information that is required for a purchase. On the other hand, a CMS collects ALL leads, not just the ones that turn into sales and typically are more vague and have more information that does not necessarily pertain to the dealership. When you combine all the first-party data that you have from customers and leads in your CRM with the full scope of your dealership operations and more detailed customer information, your marketing strategy will reach new levels.
Why does First-Party Data Matter in Marketing?
Once a customer has interacted with your business and provided you with first-party data, this information can then be used to create ads and experiences with your brand that feel more personalized. For example, if a customer was looking on your dealership website for a specific car, in a specific price range and color, you can than take this information to serve them ads that are retargeted specifically to them, showing them exactly what they want to see, making it easier for them to find exactly what they are looking for and purchase from you.
First-party data is the most relevant and accurate data that a business has access to. When data is collected directly from your business, you know that you can trust it. An issue that comes with using third-party data is that it is not all accurate, causing you to spend money on customers that are not interested in what you have to offer. While other types of data be useful, first-party data is the only one that can explain a customer’s path to purchase and the relationship a customer has with a brand.
Another benefit of using first-party data in marketing is that you will know exactly when a customer has made a purchase, allowing you to block them from a campaign that shows them new cars- like the one they just bought- and instead, show them ads about a warranty or special you have on oil changes. This not only improves the customer’s experience but saves you money.
Predicting the future
When you combine the data from your CRM, DMS, website, social pages, and other customer feedback such as surveys, you create a wave of information that not only tells you how your business is doing and what your customers are interested in, it can also tell you what is going to happen. We use predictive analytics to determine when buyers of different types of cars will be in the market again. For service, we track recent transactions and predict when customers will next be in the market for an oil change, tires, or brakes. By combining interest (CRM), sales (DMS), and website data, we can proactively bring past customers back into the market.
Although there are countless benefits of first-party data, the same cannot be said about the number of platforms that allow dealerships to harness their full power. Combining all your software and keeping your data up to date is not easy to do. It would take hours and hours to collect and analyze all the data that your dealership produces in a single day, let alone to tell you how you did for an entire month. At Driven Data, we figured out how to automate this process and provide dealerships updated information every single day, and to get it securely to the market platforms that drive traffic to your business. Our custom audiences, built from first-party data, drive the right shoppers to your website and keep you from wasting money on customers you’ve already acquired.
Having all that data, we have also built an analytics platform to keep you up to date on every aspect of your business, covering leads, sales, inventory, web traffic, and marketing. Easily find the bottlenecks in your process and improve in the areas that most affect your bottom line. You can even see how you’re doing compared to other dealerships – all from the computer on your desk or the phone in your pocket.
Don’t let anymore of your data go unused. Connect with Driven Data to put your data work for you.