May 15th, 2023

From CRMs to CDPs:
How to Achieve Wins Today
While Laying the Critical Groundwork for Tomorrow.

In March, the sale price of the average new car slipped below sticker price for the first time in almost two years.1 After multiple record-setting years, and as dealership inventory builds, the need to sell again becomes a major priority. To gain a competitive advantage in the increasingly competitive post-COVID environment, dealers are seeking to deliver personalized consumer experiences fueled by robust, timely and easily accessible data. But as today’s dealers and dealer groups know – or are painfully learning – that’s easier said than done. Customer Relationship Management (CRM) software created an important breakthrough when it was first introduced over two decades ago. Now, the cracks in your CRM’s armor are becoming more and more evident, and relying on your CRM as the preeminent customer data and analytics hub is fraught with pitfalls.

Dealers, their partners and providers, have challenges accessing their CRM data in a timely, robust manner. Additionally, partners & providers are now even being charged for access to data for dealers they are already supporting. As a result, they are forced to pass costs onto dealers, resulting in increased prices for the same or even degraded services. Because CRMs have varying pricing models and the ability to post and receive updates to-and-from partners and providers – there are technical challenges and financial disincentives for sharing data and creating/maintaining a holistic customer record. Additionally, because many dealers’ CRMs are maintained by sales and BDC (Business Development Center) teams, they contain many omissions and inaccuracies, and consequently, result in a flawed picture of their customers.

What dealers are demanding is functionality that a CRM can’t deliver – but a Customer Data Platform (CDP) can. A CDP combines data from all sources of a dealer’s consumer data to create a single, centralized customer database that contains details about every consumer touchpoint and interaction. Additionally, CDPs have analytical and activation capabilities that can deliver reimagined communication and customer experiences. The road from being CRM-dependent to full CDP implementation is complex. It will take time and investment. But you can start now.

Because CRMs have varying pricing models and ability to post and receive updates to-and-from partners and providers — there are technical challenges and financial disincentives for sharing data and creating/maintaining a holistic customer record.

Questions to Ask Yourself. Steps to Take.

If you’re like most dealers polled, you’re familiar with CDPs (82%), see their benefits (95%), and plan to buy one (82%). That’s according to a recent study by The Harris Poll2, commissioned by Urban Science. The investment costs, however, can be significant. The good news is you can get to the CDP future by taking wins along the way with CDP-aligned partners. Begin with a careful assessment of where your dealership currently stands in regard to your customer data, then plan accordingly.

Here are some questions to ask yourself (and your CRM/CDP-aligned partner), and steps to take, to begin the process of planning and executing a successful CDP vision and strategy that drives higher customer LTV and incremental sales.

When asking dealers about CDPs:

  • 82% are familiar with CDPs
  • 95% see their benefits
  • 82% plan to buy one

  1. What actions have you or your CRM partner taken to lock down your data? It’s critical that – at a minimum – you control who has access to your data and know how they’re accessing, using and safeguarding it. There are updated requirements to the FTC’s Safeguards Rule as it applies to auto dealerships, and the deadline for complying is now June 9, 20233. You wouldn’t leave your dealership unlocked. Be sure to do what’s necessary to lock down your data.
  2. What standards and processes do you have in place to ensure people and partners you’ve tasked with enriching your data are capturing all the ups and adding all your customer information? How are they using your company hardware and software to communicate with customers? One way to accomplish all of that is to look for vendors aligned with your CDP vision. Make sure you’re working with companies whose history, culture and experience elicit confidence. Look for vendors who leverage technology to its full advantage and use science as their guide. Cross any company off your list that is not willing to work with you to invent your specific future in line with your goals (and budget).
  3. What are you doing to integrate and clean up your first-party data? Do you have a system to cleanse, standardize and validate it? Integrating your varied data sets (CRM, DMS and Service data) is a good first step toward getting to where you really want to go: that is, through a CDP that also links in-site, digital retailing and other data sets that require identity resolution. Make sure you choose partners/vendors who can explain what they’re doing to implement and use safe, secure, privacy-compliant methods and techniques for data integration on the journey to your CDP future.
  4. Are you working with a partner who can provide daily sales and defection data? Data is only as good as it is timely. Any salesperson who reaches out to a “hot” lead only to discover they’ve already purchased elsewhere can tell you that. Integrating daily sales and defection data directly into your CRM (and future CDP) means that it can become an integral part of your daily dealership operations.
  5. What’s happening to your defected leads? Too often, salespeople abandon those leads when the reality is what’s “cold” on the sales side could be “hot” in your service operations. Do you have the ability to train your salespeople on known lost opportunities and how to ensure they experience fewer of them? If not, look for a partner who can better empower your salespeople to pivot communications to truly relevant customer messaging, thereby creating a culture that nurtures relationships and encourages future business. Overall, choose a partner who can better empower your salespeople to learn from both their wins and losses, and confidently close more deals.

One final thing to keep in mind as you move forward: be sure to do your homework on the data sources you’re considering adding to your consumer database. It’s imperative you choose high-quality data from companies with proven data management and secure data-access experience, since it’s very difficult to remove bad data or overcome a security breach.

Going from where you may be now to the future you want to experience will take time. But asking the right questions, being honest with yourself about where the answers lead, and taking even small steps right now, is a good way to start.

Science as a Solution.

Since our founding over four decades ago, our proven, scientific approach to automotive retailing has continued to improve and evolve. It’s an approach that stays ahead of the technological curve to help improve marketing, sales and service performance — and continues to be the industry standard — giving you the best opportunity for success in your dealership.

Let us show you how we can help you out-compete the competition. If you’d like to talk to someone at Urban Science about the topics discussed in this article, or if you would like to know how we can help you harness the power of timely defection data delivered by our SalesAlert and SalesMatch solutions, call or email me.

Eric DeMont
Global Practice Director
+1 313-748-7466

1. “Car Dealers Have Almost Normal Inventory Again,”

2. This survey was conducted online by The Harris Poll on behalf of Urban Science among 3,022 US adults aged 18+ who currently own or lease or plan to purchase or lease a new or used vehicle in the next 12 months (referred to in this report as “auto-buyers” or “auto-buying public”), and 250 U.S. OEM automotive dealers, whose titles were Sales Manager, General Manager or Principal/VP/Owner. The auto-buying public survey was conducted from January 26 to February 15, 2023. The dealer survey was conducted January 26 to February 17, 2023.

3. “FTC Safeguards Rule,”

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