There are a lot of marketers out there claiming that they perform magic. There is no end to those who claim to have a secret formula to get customers to flock to your showroom. Whether it is a program to attract customers who haven’t been in to see you for a while, or a plan to bring in customers based on a pitch to refinance their loans, or a system to prospect your customers to sell them a second car, they all have one thing in common. Simply provide them with access to your customer base, and watch the magic happen! Unfortunately, the only magic you may see is the equity in your customer list disappearing.
It is puzzling how willing dealers are to give vendors with whom they have no experience access to customer information. Sure, a marketer may give you an agreement under the FTC Safeguards Rule that it won’t misuse the non-public private information of your customers. But what good is that from a company that may have little or no assets? What good is that from a company that may fold at any time and be reconstituted with a new name at a new address?
Your customer information is a valuable asset of your business. Simply the data on buying patterns and pricing can be sold to companies who market the results. The actual names, addresses, email addresses, and phone numbers of your customers are much more valuable. Why risk making that available to someone you know little about?
If you wish to do business with a marketer who must use your customer information, what do you do? The first step, without question, is to get a safeguards agreement pursuant to the FTC Rule. The Rule requires that. But you must do much more.
- Check out the vendor. Where is it located? What does a rating service have to say about it? Are its references real, are they actual car dealers, and what do they have to say about the company? Does the company have bank references? Does the company have vendor references?
- Do not simply give open access to your DMS. Once in your DMS, the marketer can take any information it wants.
- Even when pushing information from your DMS, select the information carefully. Doing a promotion to customers whose financing is maturing? Just push that customer data. Don’t give out your whole customer list and allow your vendor to sort it.
- Under the agreement you sign with the supplier, to what use can it put your information? What limits on the use of the information are included? If there is misuse and you need to sue, can you file suit in your own home town or do you have to go across the country to sue?
- Is the company willing to include in its agreement that it will not use any of your information for any purpose whatsoever? Often, companies will agree to protect your private customer information but they will develop information profiles from your data that they will market. If you do not want this, get an agreement that they will not do this.
- Will the marketer’s senior executives sign a personal guaranty of its agreement with you to safeguard your customer information and protect it from misuse?
If you received an email from someone you don’t know telling you that they can magically transform your life if you just give them the opportunity to visit your home and spend a few hours one evening while you and your family are at the movies, would you do that? Of course not. You know you have a very high likelihood of returning to a house that has been cleared out. So why do that with your business? Your customer information is one of the most valuable assets of your dealership. Protect it. Make sure you know with whom you are dealing, and that you have solid assurances that your information will be protected.