5 hidden costs of disconnected data in the auto industry

Brian Edwards

5 hidden costs of disconnected data in the auto industry

As the automotive industry races forward with innovations in electric vehicles, autonomous driving, and connected car services, data stands as the critical fuel driving this transformation. Yet many companies struggle to harness their data's full potential due to fragmented systems.

The disconnect between in-vehicle data, product data, and sales and marketing data leads to missed opportunities and operational inefficiencies. OEMs that bridge these data silos unlock significant advantages in revenue growth, marketing efficiency, and customer retention. By integrating data across all touchpoints, they can create seamless, personalized customer experiences, optimize marketing spend, and drive agile innovation.

Besides, as an automotive customer, would you not already expect OEMs and dealers to be working collaboratively together to make a better vehicle ownership experience?

Thus, addressing data fragmentation is a strategic imperative in the competitive automotive landscape.

1. Lost revenue opportunities

Disconnected data creates inconsistent customer experiences that lead to duplicative or, even worse, conflicting messages. For example, multiple emails about the same promotion from different departments may diminish consumer perception of the brand. Contradictory messages may cause customers to disengage entirely. And over-communication that’s perceived as non–value add may lead to customers marking a brand’s messages as spam, further damaging brand reputation and reducing the effectiveness of future marketing campaigns.

The lack of a single customer view, caused by data silos between OEM-owned digital channels, dealership systems, and service data, means that valuable insights are lost in the shuffle. For instance, a customer who shows interest in a specific vehicle online might get generic marketing materials instead of tailored offers that align with their preferences. Lacking a unified view, means OEMs can’t effectively personalize marketing efforts, predict customer needs, or drive loyalty programs. This gap in personalization is a missed opportunity to meaningfully engage customers.

Incomplete visibility into customer data also hinders the marketing team’s ability to proactively predict and respond to customer needs. This inability to integrate and analyze data comprehensively limits the potential to uncover valuable insights that could inform strategic decisions and optimize customer interactions. For example, if service data is isolated from sales and marketing data, OEMs miss the chance to offer timely maintenance reminders or upgrade options.

2. Limited AI capabilities

Disconnected data significantly affects the use of AI to drive marketing efficiency. When data lives in silos across different systems and departments, AI algorithms offer predictions without a full picture. This leads to costly miscalculations on a marketing campaign solely because the AI couldn’t access the comprehensive datasets needed to generate accurate insights and predictions. Ultimately this incomplete customer profile, reduces the effectiveness of personalized marketing campaigns.

As a result, marketing teams struggle to target the right audience with the right message at the right time. The outcome, increased inefficiency in the use of marketing budgets and lower return on investment. Furthermore, the inability to leverage AI for predictive analytics means missed opportunities to anticipate customer needs and behaviors, ultimately affecting long-term customer acquisition and retention strategies.

By integrating data sources and creating a unified data ecosystem, companies can unlock the full potential of AI, driving more effective and efficient marketing efforts.

3. Reduced customer lifetime value

As more brands launch EV-focused digital sales platforms, they face significant challenges in integrating online reservations, financing, and in-person dealership experiences. This fragmentation continues prove challenging for OEMs and creates a disjointed customer journey, where a customer might start their car-buying process online but encounter hurdles when transitioning to in-person interactions at the dealership.

For example, a customer who reserves an EV online might face redundant paperwork or mismatched information when they visit the dealership. And service data is often fragmented, making it difficult for OEMs to track EV performance and predictive maintenance needs.

These data gaps ultimately reduce customer lifetime value, as customers are less likely to return or recommend the brand that struggle to bridge the online digital and in person divide.

4. Inefficient marketing spend

In North America, dealers and OEMs often run separate marketing campaigns, leading to redundant ad spend on platforms like Google and Meta. This misalignment means both parties might be competing for the same customers, resulting in wasted marketing budgets and diluted campaign effectiveness.

Without data-sharing agreements and centralized attribution models, it becomes nearly impossible to optimize customer acquisition costs. This lack of coordination not only inflates marketing expenses but also hampers the ability to measure the true impact of marketing efforts, leading to suboptimal resource allocation and missed opportunities for customer engagement.

The issue of misaligned marketing strategies is not limited to North America; it also affects OEMs and dealers in EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific) regions. In these markets, the lack of coordination between OEMs and dealers can be even more pronounced thanks to diverse cultural and market dynamics.

In EMEA, varying regulations and consumer behaviors across countries can complicate marketing efforts, while in APAC, the rapid digitalization and mobile-first consumer base require highly synchronized campaigns. Without a unified approach, marketing spend is often inefficient, with both OEMs and dealers failing to capitalize on complimentary strategies that could enhance customer reach and engagement.

5. Inability to take advantage of new revenue channels

With platforms like Amazon Auto entering the market, OEMs must find ways to integrate retail partnerships while ensuring customer and transaction data flows back into their ecosystem. Failure to do this can result in lost opportunities for new revenue streams.

For instance, if an OEM partners with a major online retailer to sell vehicles but the transaction data remains with the retailer, the OEM misses out on valuable insights into customer preferences, ancillary accessories, and buying behaviors. These insights are crucial for developing targeted marketing strategies, personalized offers, and loyalty programs. On top of that, without integrated data, OEMs can’t track the full customer journey, from initial interest to post-purchase service, limiting their ability to enhance customer experiences and drive repeat business.

Successfully integrating retail partnerships requires robust data-sharing agreements and advanced analytics capabilities to ensure that all customer interactions, regardless of the sales channel, contribute to a comprehensive understanding of the customer and support strategic business decisions.

The bottom line

The automotive industry is poised for reinvention, creating better customer journeys but disconnected systems are hindering innovation. The costs of fragmented data can be significant, impacting revenue, marketing efficiency, and customer experience.

Our team members are experienced in finding these disconnections and breaking the through data barriers to fuel AI initiatives and data-based decision-making. Schedule a call with us to talk about unlocking the full potential of your data.