April 24, 2024


General For All

How CDPs Are Improving the Automotive Industry


Cars on an automotive assemble line

Adobe Stock

Buying a car used to be a straightforward process. Go to the dealership, talk to a salesperson, test drive something on the lot, negotiate terms, drive away with a new car. But the industry’s decentralized nature made it difficult to see where customers were entering the funnel or how automakers and their dealerships could bring them back in if they ever dropped out.

The pandemic upended the automotive industry, as it did so many others. With limited opportunities for in-person selling, automakers, dealerships and customers needed to become comfortable with digital processes, interactions and transactions. All ideas that had been experimented with since 2000 suddenly became necessary to serving customers and staying in business. As a result, the acceleration of digital retailing investments and tools is today creating massive volumes of digital exhaust that people generate as they research, buy and own a car. Data presents a wealth of opportunity, but without the right technology, it’s hard to see through the exhaust and have a clear view of the customer.

“CDPs are a natural fit for the automotive industry,” says Steve Schmith, director of automotive strategy for Acxiom. “Certainly in the business of selling cars because people have so many options and channels available as they review and shop for the vehicle they want. CDPs can help bring those shopping behaviors together to create a single view of the customer and allow marketers to deliver personalized, real-time marketing. But people have years-long, personal relationships with their cars, and CDPs also offer additional opportunities for automakers, dealers and even providers of in-vehicle connected features to engage consumers throughout the ownership lifecycle in areas like services, extended warranties and subscription models.”

We talked with Schmith about the advantages CDPs bring to the automotive industry and explored how CDPs can be used to improve the customer experience, drive customer loyalty and ultimately lead to greater sales opportunities.

The Business Case for CDP Adoption in the Automotive Industry

How automakers sell to customers has always been fragmented. Ad campaigns tend to be aimed at as wide a demographic as possible, targeting millions of potential customers in the hopes of making a sale. It’s no wonder digital ad spending in the automotive industry is projected to reach $19 billion by 2023.

These days, the wealth of digital data that comes from consumer research presents greater opportunities for targeted marketing personalization, if automakers use CDPs to ingest that first-party data. “One of the greatest business cases for CDPs is increasing personalization while decreasing cost,” says Schmith. “If automotive marketers use CDPs to have a better view of their customer, they are better able to drive targeting and reduce marketing costs at the same time. It’s a win-win.” Ingesting first-party data into a CDP gives automotive marketers greater insights into consumer buying patterns than ever before, giving them the ability to deliver smarter, more targeted ad campaigns and, moreover, do that consistently in ways that are personal the entire time the customer owns the vehicle.

Building Long-Term Relationships Between Customers and Dealerships

Across the automotive customer lifecycle there are numerous opportunities to attract and retain customers. Doing so can also help dealerships drive profitability, particularly in areas like service and add-on packages like gap insurance, wheels and tire protection and extended warranties — all areas that often generate higher margins for dealers than the actual sale of a vehicle. How big is that opportunity? Consider that U.S. consumers spent more than $175 billion in 2020 on car maintenance and repair. “Selling the car is only the first step; now you need to engage and entice the customer to come back for more,” says Schmith.

For dealerships, selling the car is just the beginning of what can possibly be a longtime relationship with customers — but only for those who put in the work of building trust. Today’s cars produce a wealth of data, which dealerships can use to nurture those relationships. “CDPs can provide a wealth of insights into consumers’ driving habits, which can be used for personalized messages,” says Schmith. “CDPs are a game changer in their ability to use predictive analytics to drive personalization, engaging consumers with just-in-time maintenance notices and encouraging consumers to come back to the dealership again and again for those services. And those brands that successfully deliver that kind of customer experience likely have a competitive advantage when that person is ready to buy their next vehicle.”

A Long-Term Sales Strategy: The Case For EVs

Automakers are currently at an inflection point around electric vehicles. While non-gas cars currently make up less than 5% of all car sales, this figure is expected to grow exponentially, reaching 45% market share by 2035. The move from gas-powered to electric-powered vehicles will impact the world much the same way as the move from horse-drawn carriages to gas cars.

With electric cars averaging $70,000, the price is currently out of reach for some. But with prices dropping and new players and models entering the market each year, the EV industry is at a tipping point. “EVs are moving from early adopters into broader adoption,” says Schmith.

And just because EVs carry a high price tag now doesn’t mean customers don’t want them. Deploying a CDP to capture customer research can identify intent, which automakers can use to predict when and how people will buy. “CDPs allow for personalized messaging regardless of where consumers fall on the adoption bell curve, from visionary, to skeptic,” says Schmith. “This requires a long-term approach to the messaging, not ‘Buy this’ but ‘Here’s where this thing fits into your life.’ If you’re using a CDP to target customers who are 5–7 years out from buying an EV, the CDP gives you that view into who they are and what they want. Then, by the time they’ve come around, you can grab them.”


Digital retailing in the automotive industry had been talked about for decades without gaining any traction. The automotive industry’s response to the COVID-19 pandemic forced digital transformation among automakers and dealerships. Advances are coming in leaps and bounds — automotive digital retailing used to be no more sophisticated than being able to sign a form electronically. These days, it’s so much more.

By adding CDPs into their technology stack, automakers and dealerships can get unprecedented insights into customers’ buying habits. Knowing what customers are researching allows automakers to offer personalized car-buying options — critical in this highly personal industry where consumers are fiercely brand loyal. Beyond the sale, data collected on the cars themselves allows dealerships to market relevant services to the customer where and when they need. Even further out as the future of mobility unfolds and cars increasingly drive themselves, CDPs will allow marketers to engage people inside the vehicle while they are busy doing things other than driving as they move from one place to another.

See how Acxiom can unify your customer record at acxiom.com.

Tim is the senior manager of research and content for Simpler Media Group. In his role he writes content, market guides and data-driven research reports for all of SMG’s internal and external clients.


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