A number of automotive dealership executives will be attending the NADA Convention next week in New Orleans to learn more about Customer Data Platforms (CDP). I proposed a workshop on the topic of Automotive CDPs but the NADA educational review board passed on the concept. Momentum is building and dealers have many questions, so maybe next year NADA will showcase more first-party data management workshops.
CDPs will be the third primary software platform used by dealers, filling gaps created by current DMS and CRM technology.
I asked a number of leaders in the automotive CDP industry to share some reasons why a CDP project could be significantly delayed, need a hard reset, or just fail completely. I have listed the responses which were submitted for your review.
I also recommend that dealers who are looking to implement a CDP, to read my new book: Automotive CDPs – A Planning Guide for Dealers.
Reasons why CDP projects fail
Here is a summary reasons why CDP project may fail, submitted from leaders who have learned the hard way. It is my hope that dealers reading this newsletter can avoid similar pitfalls.
- Not asking who the main user of the CDP will be: will they be using CDP in addition to another software, or will it be a replacement for an existing platform?
- Not conducting a thorough review of the dealer’s tech stack and vendor readiness to support a CDP and real-time data feeds.
- Not prioritizing use cases and making sure that the top five are worth the time and effort to stand up the CDP.
- Taking on a capital intensive enterprise project without investing in developing in-house expertise and on-going training for staff and agency partners. If the dealership is not the captain of their data “ship,” the ROI will be very unclear and the project will go off course.
- Chasing the golden record and the perfect 1:1 communication as you will never catch it.
- Getting too focused on workflow for your BDC and Reps, as you may be trying to use the CDP as the replacement for the dealership’s aging CRM.
- Misconceptions that CDPs are “set it and forget it.” CDPs require continuous optimization and refinement based on the dealership’s goals and new vendor partners.
- Lack of vendor collaboration: vendors need to commit to integrating data into the CDP, or the CDP has to have capabilities to extract data without vendor buy-in.
- High turnover in executive leadership or marketing. If the changing of marketing leaders is like a subway turnstile, then a CDP project may not have the consistent leadership to stay afloat.
- Sales representatives oversold the capabilities of the CDP and undersold the technical complexity to achieve the business use cases discussed during the pre-contract scoping meetings.
So, do any of these warnings resonate with you?
The automotive industry is filled with software investments which have been shelved due to lack of purpose, no measurable ROI, and changing leadership.
CDPs are not a technology that dealers should be thinking about changing every year or two based on price or a shiny new feature. The dealership needs to have a clear product owner and a team which has been trained to utilize the unified data in the CDP.
Don’t go it alone
Dealer groups who are actively investigating ways to unify and activate their first-party data will benefit from carefully reading my new book and then interviewing potential CDP partners based on the RFP framework I introduce in the book.
Dealers who also need more detailed assistance with CDP use cases would benefit from attending the 2025 Digital Marketing Strategies Conference (DMSC) where the latest winning ideas for first-party and third party audiences will be on display.
