Dodgy data loses dealers millions in missed profits due to losing track of customers

Dealers that fail to cleanse their databases are leaving money on the table, missing out on low-hanging fruit that could be easily captured with more accurate customer records, according to data expert ADS.

According to ADS, more than half of all customer records in dealership databases are incorrect, resulting in wasted time, misdirected communications, and millions in missed revenue opportunities.

In its analysis of several major dealer groups’ databases, ADS found that a staggering 74.1% of customer records were flawed in some way.

In one database of 424,000 records, over 112,550 customers no longer owned the car originally listed, and 61.2% of MOT dates were incorrect.

 The study also uncovered errors such as outdated addresses, vehicles that had been scrapped or written off, and even records of deceased customers still receiving communications.

ADS estimates that incorrect data is leading to missed opportunities to engage with current customers.

The automotive retail sector, according to ADS, lags far behind industries like food retail in terms of the quality of customer data management.

The consequence is that many dealers are failing to maximize their revenue streams by not keeping track of their customers.

In fact, ADS calculates that fixing just 1,000 discrepancies in MOT data alone could generate up to £40,000 in additional workshop revenue, based on a 30% booking rate at a 35% profit margin.

Given that these discrepancies often account for tens of thousands for large dealer groups, the potential revenue loss is enormous.

Jon Sheard, operations director at ADS, explained: “There are many reasons why dealers often fail to grasp the nettle of cleansing their customer databases. These range from simply not realising how poor their records are to difficulties in re-importing a fully accurate customer database into their dealer management system (DMS) without expert help. Some dealers also mistakenly believe that they have to manage the data cleansing themselves, which is not the case.”

By tracking real-time changes throughout a vehicle’s ownership cycle, ADS’s data services help dealers accurately reflect changes such as new addresses, vehicle registration changes, or even the unfortunate case of a customer's death.

It says that research consistently demonstrates that customers are more likely to respond to offers when they are contacted at a relevant moment, making accurate data key to increasing customer engagement and loyalty.

ADS’s advanced data-checking system offers dealers the ability to maintain an accurate and dynamic view of their customer base. For example, knowing when a customer’s MOT is due can allow dealers to contact them at the right time, offering relevant services and increasing the likelihood of a booking.

As Sheard noted, “Our analysis reveals a lot of low-hanging fruit that is easily captured simply by knowing the basics, such as where people live, whether they still own their car, and when its MOT is due.”

By sending relevant offers and reminders, dealers can ensure that their communications are not seen as irrelevant or intrusive, which can happen when incorrect data is used. Moreover, real-time data cleansing could prevent dealers from wasting resources on campaigns aimed at customers who no longer own the vehicle in question or have switched to a different dealer.

“By allowing customers to drift away while wasting time and money sending communications to incorrect addresses or customers who have moved on, countless opportunities are missed every day,” Sheard said. “However, with the right data, dealers can turn these missed opportunities into successful engagements that generate revenue.”

“Timely data cleansing is the answer to many of the challenges dealers face,” said Sheard. “The investment in ensuring database accuracy is far outweighed by the boost in revenue that comes from more efficient and relevant customer contact. By addressing these issues, dealers can improve their margins, enhance customer satisfaction, and avoid missing out on profitable service and sales opportunities.”