By David Barkholz, Crain News Service
DETROIT (Feb. 25, 2014) — Jaguar Land Rover North America is putting auto dealers on the spot by requesting customer data from dealership computer systems — and promising a financial penalty to dealers who resist.
Some dealers worry that, in the worst case, they will be legally liable if sensitive bank data leak out to scammers. More immediately, dealers fear they will run afoul of federal regulators who are enforcing strict rules that control access to customer information.
"We don't want guys in our systems," said a dealership source familiar with the request, which is part of a Jaguar Land Rover marketing program known as Single View CRM. It was announced Feb. 7.
Jaguar Land Rover says dealers' data will be adequately protected. And it's upping the ante by saying it will withhold quarterly incentives, which could top six figures per dealership, from stores that fail to sign the marketing agreement.
The dispute stems from auto makers' growing thirst for information that they can use to craft marketing programs to boost sales. But dealers have the customer data, putting them on a collision course with factories.
Factories are seeking much more customer information from dealers, said Brad Miller, associate director of legal and regulatory affairs for the National Automobile Dealers Association (NADA). And as requests have escalated, so has dealer awareness of the legal liabilities if sensitive customer financial information is vacuumed from their databases and, worse, if it falls into the wrong hands.
Nobody denies that pulling together vast amounts of customer information is becoming critical to the auto industry, Mr. Miller said.
Factories and dealers can create powerful marketing tools by combining consumer data with that collected by third-party vendors. For instance, marketers can know when to pitch vehicles and services, such as extended warranties, to customers whose leases are about to expire.
Insight provided by data on prospective and current customers is the reason for Jaguar Land Rover's new marketing program, Christopher Marchand, executive vice president of operations at Jaguar Land Rover, said in a statement.
"A CRM system allows the company and the retailers to best manage all aspects of a customer's experience with the brands and to tailor our sales and services efforts appropriately," Mr. Marchand said.
Vehicle dealers need to be very careful, though, about which customer data they share with the factories or anybody else, NADA's Mr. Miller said.
Dealers must comply with rules from the Federal Trade Commission (FTC) that prohibit them from sharing nonpublic personal information about customers without the customers' permission, he said.
In general, that's financial information about a lease down payment, loan terms, amount financed or other sensitive information. The rub, Mr. Miller said, is that the FTC assumes that sensitive information has been shared if a vendor has access to it—even if the vendor ignored the information.
NADA recently published dealer guidelines to protect sensitive consumer data, Mr. Miller said.
Dealers should never let vendors have full access to a dealership management system or customer-retention data without knowing what data fields are being pulled, he said. Some brands use independent data-extracting companies to pull data from dealerships' management systems.
The company said it is not seeking any data that would put dealers in violation of FTC rules.
Michael Levitan, chairman of the Jaguar Land Rover Retailer Cabinet, said in a statement that dealers helped the plants work though data security and compliance concerns.
"Every retailer may not be 100 percent happy with it, but it is the direction the company is going," said Mr. Levitan, COO of the Long Island Automotive Group, which holds Jaguar and Land Rover franchises.
This report appeared on autonews.com, the website of Automotive News, a Detroit-based sister publication of Tire Business.
Has your business been invaded by people looking to catch, train and battle Pokemon with Nintendo’s Pokemon Go app?
|No, not that I'm aware of.||
|Yes, but we've banned it for non-paying customers.||
|Yes, and we've been happy to have them.||
|They've tried, but we've already found all the Pokemon in the shop's vicinity. Gotta catch 'em all!||
|Total votes: 106|