Strategies for Collecting First and Zero-Party Data in the Car Industry
Data at the Forefront
Today, data has become crucial to successful marketing and building good customer relationships.
However, the rules around data collection are changing, and people are more concerned about their privacy. This means that the traditional ways of collecting data are changing, too.
Before going further, let's explore the kinds of data businesses use.
Understanding Different Types of Data
Zero-Party Data
This is the information that customers share with brands willingly, usually to get personalised services or rewards. For example, when a lead fills out a form on a website requesting a test drive, they give zero-party data.
First-Party Data
This is the information collected about a customer by you on your website or mobile app. For instance, a customer's browsing and engagement history is first-party data.
Second-Party Data
This is data from another company with a direct relationship with the customer you bought. For example, you might purchase data from a car accessory retailer to target customers who bought accessories for a specific car model.
Third-Party Data
This is data collected by companies that do not have a direct relationship with the users from whom the data is collected.
This data is usually gathered from various sources and sold to or shared with companies for marketing purposes. For example, data bought from a data brokerage firm or information collected by Google Analytics would be considered third-party data.
The marketing industry was built on third-party data, but that's changing now.
The Changes
Using third-party data is becoming difficult for several reasons:
Stricter Privacy Rules: Laws like GDPR and CCPA are imposing more stringent data collection and use rules, focusing on transparency and user consent.
Consumer Privacy Choices: More people are becoming aware of data privacy and choosing to opt out of data collection, which reduces the amount of third-party data available.
Changes in Technology: Browsers are phasing out third-party cookies and changing how device ID tracking works, limiting the ways to collect third-party data.
Quality Issues: Third-party data often lacks detail and personal touch, leading to less effective marketing strategies.
Cost and Strategy Considerations: Companies find that collecting first and zero-party data can be cheaper and give a competitive edge by offering exclusive insights into customer preferences.
Building Trust: Moving towards open data collection practices can help build customer trust, creating long-term relationships and protecting the brand's reputation.
Since you can no longer rely on third-party data, you need to focus on first-party data strategies.
Strategies for Collecting First and Zero-Party Data
Talking to Customers Directly
Engaging customers directly through websites, social media, and email campaigns remains vital. For instance, you could develop interactive content or surveys to understand their preferences regarding car features and after-sales service, host webinars or virtual car tours where customers can ask questions and share feedback, etc.
Offering Personal Touches
Offering personalised experiences can encourage customers to share more data willingly. For instance, you might offer recommendations or special deals on car accessories based on the information given by similar customers or implement a chatbot that can provide personalised advice based on individual customer preferences.
Using Loyalty Programs
Loyalty programs are an excellent way to collect first and zero-party data. Customers are typically happy to share their information in exchange for rewards or unique benefits. This could involve offering points for service visits, redeemable for discounts on future services or accessories.
Test Drive Experiences
Test drives can collect customer preferences and feedback data during these experiences.
Customer Reviews and Testimonials
Encourage customers to leave reviews and testimonials on your website. This can provide insights into their experiences and preferences, which you can use to tailor your offerings and marketing strategies.
In-Dealership Interactions
Utilise the interactions that sales representatives have with customers in the dealership. During face-to-face interactions, sales representatives can collect data on customer preferences, budget, and other details, which you can use to personalise future communications and offers.
Vehicle Service Feedback
After a vehicle service, ask for feedback through a simple survey. This not only helps in improving your service offerings but also in understanding the customer's preferences and concerns better.
Community Events and Workshops
You can organise community events and workshops to interact with potential customers and collect data on their preferences and needs. These events can also serve as a platform to showcase your latest offerings and collect feedback.
Subscription Newsletters
Offer subscription newsletters that provide your brand's latest updates, tips, and offers. Through these newsletters, you can collect data on customer preferences based on the content they interact with and the offers they redeem.
In case you are already doing all of these, great! If not, identify as many new ways to collect zero and first-party data as feasible to build a rich database that will enable you to provide more personalised and effective marketing campaigns and customer experiences.
Why DMS Won't Help Much
Traditional Dealer Management Systems (DMS) were designed to manage dealership operations like inventory management, sales processing, financial reporting and handling essential customer communications rather than focusing on collecting and using first-party data to manage customer relationships.
Here are a few reasons why they are not the best tools for this job:
Limited Customer Engagement Features: Traditional DMS lack advanced tools to offer the interactive and personalised experiences that modern customers expect.
Data Silos: These systems usually work in data silos, making it hard to bring together customer data from different touchpoints smoothly. This separation can block the collection and use of unified first-party data.
Lack of Analysis and Insights: Traditional DMS cannot effectively analyse first-party data to get valuable insights that can guide marketing strategies and customer engagement efforts.
Not Enough Data Security and Compliance: Since these systems predate the new data protection rules, they don't have the features to ensure data privacy and compliance, which is very important when handling sensitive first-party data.
Inflexibility and Scalability Issues: Traditional DMSs are often quite rigid and unable to adapt to the changing needs of modern dealerships, which now need better data management capabilities to collect and use first-party data effectively.
Integration Challenges: Integrating a traditional DMS with modern CRM systems, CDP or marketing platforms, and other tools can be complicated, limiting the chance of creating a unified view of the customer.
So, to effectively collect and use first-party data and move to the future, car manufacturers and dealerships need to add new solutions to their technology mix.
New Technologies Needed
Customer Relationship Management (CRM) Systems
Modern CRM systems can help bring together and manage customer data effectively, giving a full view of the customer and making personalised engagements possible.
Data Management Platforms (DMPs)
DMPs help gather data from various sources, organise and enrich it, analyse it, segment the audiences and in real-time trigger marketing automation.
Marketing Automation Platforms
They orchestrate communication across different marketing and communication channels, help you talk to customers more effectively, and save much money on automating repetitive tasks.
Customer Identity and Access Management (CIAM) Platforms
CIAM platforms streamline the process of identifying and managing customers across various channels. They safeguard sensitive data, ensure secure and seamless user experiences, and facilitate personalised interactions, enhancing customer trust and satisfaction.
Looking Ahead: Moving Towards a Customer-Centric Approach
You are at a turning point where you can lead the industry in adopting more trustworthy and customer-focused data practices.
Collecting first and zero-party data helps you build stronger relationships with your customers, encouraging loyalty and promoting steady growth in the long run!