Why dealerships must understand the relationship between CRMs and CDPs

Every dealership marketer has probably now heard about the importance of customer data platforms (CDPs) for their dealership business and marketing strategy. And frankly, it’s a no-brainer. In order for dealerships to grasp what their shoppers are doing online – like which vehicle they are researching – they need to invest in the latest technology that gives insight on customer behavior.

What is a CDP?

A customer data platform is a technology that cleans, sorts, and consolidates a business’ customer data so that there is one single 360 view of a customer’s behavior.  It integrates with multiple sources so that all the information is being collected from every customer touchpoint. Data is being pulled from:

  • Website
  • CRM
  • DMS
  • Ad platforms
  • Analytics platforms
  • Third party sources

One of the biggest benefits of a CDP is that the data being collected can then be leveraged for marketing campaigns. The structure of the data makes it easy to query things like, “show me everyone who was on my website in the past 10 days” and create tailored audiences for marketing accordingly.  It’s incredible to think about the competitive advantage a dealership can have once they can slice and dice audiences based on very specific behavior to show just the right incentive to the audience.

How does a CDP work with a CRM?

It’s critical to understand the difference here between a CRM and a CDP. A CRM (customer relationship management) houses all the dealership lead information and sales activity.  It serves as a software for sales and BDC to work the leads with proper and timely follow up.  The CRM is intended to manage opportunities and predict closing forecasts – a tool for sales managers to assess activity on a daily basis.

This is not to say that the CRM doesn’t have lead information; it certainly does.  However, a CRM is used by multiple sales people and ingests data without formatting it.  If someone converts on the dealership website on a trade-in offer and that very lead actually exists in the CRM already, there is no real process (or automation) for consolidating and merging the lead into one clean file. That’s where CDP technology comes in.

So while CRMs focus on lead management and sales opportunities, CDPs are the necessary layer on top, consolidating the shopper behavior and journeys for one single view.

How do you choose a CDP for your dealership?

Investing in a CDP can be a difficult leap for dealerships, as until now the CRM has been considered the only place for lead information.  But as technology evolves – and therefore also shopper expectations – it became clear that there needs to be a data hub in order for dealerships to survive in today’s climate.  Here are some questions you should be asking when looking for the right CDP for your dealership.

  1. Which data sources does this CDP integrate with? What is integration with my automotive CRM?
  2. Is the data structured in a way for me to easily execute omni-channel marketing campaigns?  Can I leverage the data, or only see it?
  3. How does the CDP merge the shopper information?
  4. How much manual effort is required for my dealership?  Do I need to maintain anything or is it automated?
  5. Is my data being stored securely? Is this CDP following security best practices?

As we enter the second half of 2022 and gear up toward a very aggressive 2023, your dealership will see massive benefit from investing in a dedicated CDP for the most competitive data on today’s shoppers. For more information on CDPs and CDXPs for automotive, feel free to download this whitepaper.

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