Digital Dealer
Business Development: Industry Alert...Your Database Becomes More Important Than Ever Before
By Forrest Scott
Business development is, and always will be, about building long-term, quality relationships. As BDCs have caught on, the talk about eliminating advertising increases. While the possibility of decreasing advertising exists, the likelihood of eliminating advertising altogether is nonsense. At best, you can reduce your advertising expense. In order for the BDC to accomplish this, the BDC must have an extensive, clean and usable database of prospects and customers.
A major law change that will most certainly impact dealers is with regard to the Driver's Privacy Protection Act, (DPPA) which was originally passed in 1994. This act has been contested and, on January 12, 2000, the United States Supreme Court unanimously upheld its constitutionality. To make matters worse, the DPPA was amended to require a driver's "affirmative"
consent, or "opt-in," for disclosure. What this means is that the states which have sold registration data in the past can no longer assume that consent was implied by a driver's failure to place a mark in a box. In the past this was called the "opt-out" option. Every state, effective June 1, 2000, must now instruct drivers that their personal information can be disclosed ONLY if they "opt-in." Each state will probably have some type of box for the driver to check if they agree to give the state permission to sell or release their personal information. I recently heard of a person who was standing in line to renew his driver's license. While doing so, a person was walking past the line asking if anyone wanted a form to fill out so they could get junk mail. There were no takers. The odds of people agreeing to allow the states to sell their personal information is at best small. As a result, dealers will be forced to seek other methods of obtaining names to use for their direct mail marketing. In case you're wondering if the law will be overturned, it is not likely. The biggest industry fight appears to have come from the press. Even with the media's power and financial strength, the highest court's vote was still unanimous.
Regarding the effect on dealers, this depends highly on which state you are in. Some of the states have refused to sell registration data in the past. As a result, it's business as usual for these dealers. However, if you are in a state where you are accustomed to using registration data for your direct mail, the change could have significant impact. In markets like Detroit, where there is tremendous brand and manufacturer employee loyalty, the impact will be serious. After allit makes little sense for a Ford dealer to mail a Taurus promotion to a GM or Chrysler employee.
Overcoming this problem is not as difficult as it may appear. We are recommending to all of our clients that they immediately purchase the specific registration data they desire. This data should be merged with their current BDC database. Be sure to remove the duplicates. Once this is accomplished, you are prepared to mail directly to the people you want to. If you do not have a program in place to keep the database clean, you should set one up. Someone should be responsible for this function, preferably your BDC manager or administrator.
This is a major issue. Some dealers think the playing field will be level. In reality, it will not. The reason is simple. Many dealers today either have a BDC with a quality database, are in the process of creating a BDC or they are simply creating a comprehensive database program. If you plan to use a database that lacks registration data for your direct mail, you may be left behind. You may also be forced to spend more, since your list will not be targeted to specific owners. Think about it. While you are mailing to people you think are interested in your product, your competition could be mailing to people they know are interested. There is absolutely no comparison. If you are not in a position to purchase the database, merge it with your current database and remove the duplicates. I suggest you sub-contract this. While extracting your database from your mainframe can be tricky, it is not impossible. We do it all the time.
The impact this change could have is significant, especially if you have an aggressive competitor who has attacked the problem and you have not. Before you decide to wait this out and see what happens, please understand that the alternative methods used to create a similar database could take years to develop and prove extremely costly. Not to mention the competitive advantage your neighboring dealer may have. I have consulted with dealers on this matter for over six years. Some have contracted with us to assist them and some have done it on their own. The fact is, we are almost out of time. Based on the U.S. Supreme Court's ruling, it appear to be now or never when it comes to registration data. As a side note, don't be surprised if other lists are attacked. Privacy has become a big issue and an individual's safety and protection appears to be the driver for this heightened concern.
Answering a recent question:
I have been looking at several BDC software
programs. Most seem expensive with long-term support contracts. Is this necessary?
The software you choose for your BDC depends entirely on the type of BDC you will have. If you plan to have a single-user system where data is brought to one person for input and this person uses the same system to print the reports, I would expect the costs not to exceed $5,000, including hardware. Support programs vary. Some have them and some do not. Some support programs have training/consulting attached to them. Naturally, training is another issue and this varies greatly. If you plan to have a BDC with several people answering in-bound telephone calls, or several people making prospecting, showroom follow-up or service follow-up calls, you may want to have a network system where more than one person could enter data and use the telephone scripts you probably have built into the program. If you choose this type of system you should pay special attention to the security that is built into the program. If everyone has the same password and equal access to the data, editing and deleting capabilities, I would keep looking.
Forrest Scott is president of Dynamic Marketing Strategies Inc. fscott@dealeronline.com
