Shop Management

Data Privacy for Your Dealership

October 13, 2022
4 min read

In a data-driven world, auto dealers are subject to the same risks and regulations as any business that collects consumer data. How well you gather, organize, and interpret your data determines how well you can compete with other local dealers. For this reason, a data breach is a worst-case scenario, jeopardizing a brand's reputation and its future revenue potential. Fortunately, there are proactive steps dealers and auto shops can take to strengthen data privacy. But first - what data is important?

What Data Should You Collect?

One area automotive dealers are wise to hone in on is behavioral analytics. Observing what actions your customers take can help you better understand their preferences and needs. This information can be gathered from your dealer management systems (DMS), sales and marketing databases, or other datasets.

Using this data to uncover each customer segment's unique value, you can improve the customer experience, raise retention rates, and target new audience segments more effectively. An auto dealership's customer data can also inform its marketing strategy and supply chain management.

Data doesn't just guide big-picture decisions — it can streamline the day-to-day workflow of your team as well. With access to real-time analytics, dealerships can better manage vehicle repairs and raise the speed at which vehicles are serviced.

With a continuous stream of data insights about how your dealership is performing – both in revenue and in the details of each repair job – dealership owners get a bird's-eye view of what's working and what's not. Dealers can track key metrics, such as cars serviced, gross profit percentage, and the efficiency at which repairs are made. Over time, this will allow your team to accurately predict repair timelines and give customers more accurate expectations.

How to Protect Your Auto Dealership Data

In any digitally-driven environment, the possibility of a data breach is real. As cybercriminals develop more advanced tactics, businesses must continuously up their game to protect vulnerable personal data like social security numbers and phone numbers.

Over the last several years, several automotive companies have been targets of ransomware, phishing attacks, and brute force attacks, all of which have occurred in the automotive industry. One such incident was the 2020 cyberattack on Honda's corporate network which derailed all aspects of their operations. Another security incident occurred in 2021 when Volvo's research and development data was accessed through a cyberattack.  

Along with managing the omnipresent risk of a data breach, dealerships are also responsible for complying with new privacy rules and the federal law surrounding cybersecurity. Customers have the right to ask how their data is being managed and shared, and dealers need to be able to answer those questions confidently. State privacy laws like the California Consumer Privacy Act (CCPA) are being developed to enhance consumer data rights due to widespread privacy concerns. As a response, auto dealers need to exercise transparency, give customers a choice, and provide reassurance about any financial information stored or shared with lenders.

You can start protecting your consumer data in the following ways:

  • Find out exactly what data you process and the related compliance rules.
  • Look for where you may be collecting sensitive customer data and how you protect it.
  • Check to ensure that you can access sensitive information at a moment's notice (if there is an issue).
  • Check if the information is protected throughout your data ecosystem - from the first touchpoint to the last, your data should be equally secure at every level.
  • Consider data-centric techniques like using pseudonyms and tokenization to create a more sophisticated barrier.
  • Update your privacy disclosures and procedures, especially if any of your data is subject to the regulations expressed in the CCPA (eg. involving California residents).
  • Check how old or irrelevant data is deleted in your company and whether it is being done securely.

Many companies have password-protected data stores in the cloud, but it's important to remember that securing the perimeter is the bare minimum. True data security goes beyond password encryption and ensures no one in the organization has unauthorized access. The more visibility dealership owners have, the better they can prevent a security breach.

Getting a Handle on Data Security

The issue of data protection is complex, and it doesn't stop at your dealer. Your partners and vendors have their own information to protect, and it's essential to make sure they're doing so. Opening up a dialogue about how information is transferred between your dealership and its partners is a good start. Review their data privacy practices concerning your own to see where improvements can be made.

Data is the lifeblood of modern business and is especially true for auto dealers. Data helps you reach new members of your target audience, build trust with car owners, and serve the immediate needs of current customers better. Learn more about how Detect Auto helps you transform your operations by providing you secure data points about your operations.

Similar posts

Read more about our takes on the industry

Start your 14-day free trial

Automate campaign management.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
No credit card required
Cancel anytime