The Art of Positioning

How Customer Data Platforms Have Dominated Dealership Marketing

If you have attended an automotive marketing conference in the last 3 years or follow automotive marketing companies or influencers on social media, chances are you have heard about Customer Data Platforms (CDP). Don’t worry… this is not another article with a sales pitch about how amazing CDPs are and why a dealership should have one in their tech stack (although I may mention some CDP capabilities later). This article will offer some insight into how this technology became such a hot topic and why the buzz has still not died down yet.

From my perspective, as someone who was among the first to market this technology to Tier 3 automotive, I believe CDPs took over the zeitgeist of dealership marketing because it was positioned as a technology that solved a lot of challenges and frustrations created by legacy CRM and DMS providers and the vendor tools that feed limited data into these systems.

What is Positioning?

In their seminal book, Positioning: The Battle for Your Mind, Al Ries and Jack Trout (2001) define positioning as follows: "Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect."

Positioning is the strategic art of defining where a product fits in the market (and in the mind of an end user), making it stand out and resonate with your target audience. At its core, positioning addresses two crucial questions: "What is this product?" and "Why should a customer care?"

With these questions in mind, CDP technology naturally found its way into the automotive retail industry and was successfully positioned as the ideal solution for dealership marketers, addressing pain points created by fragmented data, poor data quality, and the limitations of existing customer databases in automotive retail.

What Challenges CDPs Are Positioned to Solve

Let me start by saying that I do not believe that any CDP is capable of replacing a CRM or DMS—nor do I think that’s the goal. These legacy systems are vital operational tools that grow exponentially as customer records are constantly updated and utilized by multiple departments. However, these legacy systems fall short when it comes to providing clean and unified data for marketing efforts.

This brings to mind a quote from George Fuechsel, an early IBM programmer: “Garbage in, garbage out.” The same principle applies to the struggles marketers face when using data from a CRM or DMS. When these databases are filled with outdated, incomplete, or duplicate data, the quality of any campaign targeting or messaging suffers. Beyond data quality, marketers face several additional obstacles when attempting to leverage these tools for marketing purposes:

• Siloed Data: CRMs and DMS systems often store data in isolation, and do not offer the infrastructure or documentation that allows other lead generation or customer engagement tools to update existing customer records.
• Lead Sources: Most records only have a “latest source” field making it difficult to determine all of the marketing sources, mediums and campaigns attributed to a customer.
• Data Quality Issues: Records are frequently riddled with errors or duplications, making it difficult to trust the data for campaign use.
• Limited Data Activation: Their lack of integration and activation capabilities limits the ability to utilize the stored customer data in marketing and advertising platforms.
• Manual Processes: Extracting, cleaning, and preparing data for marketing purposes (like building an email list) requires significant manual effort..

This is where CDPs are uniquely positioned to shine. By consolidating and enriching data from multiple sources, CDPs create a unified customer database. With these enriched records, marketers can segment audiences and develop personalized campaigns for each audience. By solving the foundational data challenges that legacy systems weren’t built to address, CDPs have emerged as a crucial piece of a dealership’s technology stack.

A Real-World Use Case: CDPs in Action

Imagine a website visitor begins using a dealership’s online service scheduler to book a maintenance appointment. They proceed through the steps until they reach the part of the form asking which transportation option they would like to use while their car is being serviced—loaner car, shuttle, or drop-off—and then abandon the process.

With traditional systems, this data point would either be lost or remain siloed, disconnected from the customer’s other interactions with the dealership. A CDP, however, can identify this website visitor, match them to their existing records in the CRM or DMS, and integrate with the service scheduler to pinpoint exactly where the form was abandoned. Armed with this information, the CDP can trigger an automated email reminding the customer to complete their booking.

The email could include a direct link back to the abandoned scheduler with pre-filled details to reduce friction, as well as a timely incentive like a discount or priority booking option. This level of personalized, automated engagement isn’t possible with traditional systems, but it’s exactly what a CDP is built to handle.

Beware of Imposters: The True Definition of a CDP

Trends always create opportunities for innovation—and for imitation. The rise of CDPs in dealership marketing has also led to the rebranding of other tools and platforms as “CDPs” despite lacking the core functionalities that define a true Customer Data Platform.

According to the CDP Institute, a Customer Data Platform is "packaged software that creates a persistent, unified customer database that is accessible to other systems." In other words, a true CDP must:

1. Unify Data: Collect, organize, and integrate both structured and unstructured data from multiple systems, creating a single source of truth.
   1. A CDP should be able to ingest data from all of the vendor tools that shoppers interact with; like your digital retailing, credit application, trade-in tools and more.
2. Activate Data: Enable marketers to use this unified data for personalized, cross-channel marketing campaigns.
   1. A CDP should either have the ability to activate customer data through marketing or advertising campaigns.
3. Support Other Systems: Act as a central hub that feeds enriched data into other marketing and operational tools.
   1. A CDP should be completely open to feeding data to your preferred marketing agency.
4. Not Own the Data: The dealership should remain the sole owner and controller of any data that is unified within the platform.
   1. Unfortunately in automotive, there are many instances where a dealership’s data is held hostage by the platform that is storing the data.

Be wary of platforms that are rebranded as CDPs that lack these core capabilities. For example, some CRMs with added data features or marketing automation tools may try to position themselves as CDPs, but are limited in the type of data they can ingest or restrict ways they can activate data. Dealership marketers must carefully evaluate potential CDP vendors to ensure they are investing in authentic, purpose-built solutions rather than repackaged versions of existing tools.

Believe The Hype

If you are tired of hearing about CDPs I have bad news for you… this technology is not going anywhere. On the bright side, the conversations surrounding CDPs have moved away from establishing awareness and are now laying out practical use cases. I personally think it is very exciting to see the opportunities that innovative technology creates. For example, we are seeing more dealerships build in-house marketing teams, hire data scientists, and try complex marketing strategies and operational processes.

However, as the trend grows, so does the risk of misinformation. Not all platforms marketed as CDPs meet the criteria set by industry standards, making it more important than ever for marketers to understand the technology and ask the right questions when evaluating vendors.

Positioning is a powerful tool that can drive product adoption and reshape industries. But as marketers, it’s essential to be aware of the art of positioning and focus on the solutions that genuinely meet your business needs. Only then can you really start to filter out the noise and flashy objects.