Like any sales company, dealerships want to get their messaging and advertisements out to as many people as possible. It’s historically been a numbers game: throw as much as you can at a wall and see what sticks.

That is no longer the case.

Customers expect more personal interactions, and targeting the wrong customer is more than just wasted money—it’s potentially damaging to your dealership’s reputation. Here’s how.

Third-Party Data is Often Wrong

Third-party data is purchased from an external source, like an insurance company or media publication, and is sometimes used to market to a larger audience. Unfortunately, that data is often incorrect or incomplete. Aside from the fact that you have no idea when the data was acquired, sometimes third-party companies only have the information for a small share of the market. To try to make the data seem better or more complete, those companies will simply estimate and fill in what they think is the right data. But that means you’re paying for guesses.

Third-Party Data is Easily Accessible

Let’s say your dealership pays $1,000 for 20,000 prospects. That also means that every dealership in the country (and every other company as well) can purchase those same 20,000 prospects for the same price. That data is not exclusive to you in any way. And after scrubbing the data for geographic region, viable contact information, and deduplication, you may have few to no prospects left at all. That’s $1,000 of your marketing budget down the drain. And even if you do find a few hundred prospects in that list, so did all your competitors, and those targets are going to be pelted with emails that may very well seem like spam to the customer.

Marketing with Third-Party Data is Sketchy at Best

There are laws in the US and across the world like the EU General Data Protection Regulation (GDPR) that protect people from being targeted with advertisements without their consent. Crossing that line could cost your dealership hundreds of thousands of dollars. By marketing with third-party data, you’re toeing that line. And when email service providers see the high bounce rates and number of emails going straight to the spam folder, your company’s reputation takes a nose dive. You’ll likely get blacklisted, meaning that none of your emails will make it to your customers’ inboxes—even customers in your DMS.

What You Can Do Instead: Use the Data You Already Have

Get the most out of your dealership’s first-party data—that’s the information you have about your own customers. It’s free, you already have a relationship with the customer, and it’s much more likely to be accurate. You’ll be able to spot trends and then use those trends to start sending the right message to customers at the right place in the buying process. And if you’re not tracking it or don’t know what to do with it, it’s easy to get help from someone who knows the landscape. Some companies even offer AI-driven targeting to help you segment and identify specific groups of high-quality prospects in your DMS, which can result in massive improvements in engagement and revenue.

First-Party Data Allows Customization, Too

Customizing marketing messages has a surprisingly large effect on customer behavior. According to a study by Accenture, 56% of customers are more likely to purchase from a retailer that recognizes them by name and 65% are more likely to purchase from a retailer who knows their purchase history. And first-party data allows you to market to customers based on their relationship with your company, which can dramatically affect conversion rates.

How to Get the Most Out of Your Data

To save your store’s reputation and stretch your marketing dollars, we recommend relying primarily on data that’s yours—not the kind that’s compiled through a third party. Tapping into your own DMS, tracking trends, and customizing your marketing for your customers is a simple—and cost-effective—way to strategically increase sales and ROs without putting your business at risk.