Understanding the critical importance of data privacy is not just about regulatory compliance for dealerships; it’s fundamentally about safeguarding their most valuable asset—reputation.

The Impacts of a Good Reputation – Making a Buyer’s Short List

When the average customer only visits 2 dealerships before making a purchase, they’re leaning heavily on a dealership’s reputation when making their decision. And a dealership that doesn’t have their car buying experience completely buttoned up runs the risk of not making that buyer’s very short list.

Consider these data points:

• 84% of consumers say reviews are important in their choice of dealerships.
• And 93% of Gen Z use reviews to make purchasing decisions and are twice as likely to have their choice of dealership influenced by social media.

It’s also much harder to burnish a bad reputation than it is to maintain a good one. Keep in mind that one negative review from a dissatisfied customer can mean you’ll need roughly 12 positive reviews to counter its effects.

The Impact of Data Privacy on a Dealer’s Reputation

There’s been a huge upswing in data breaches and cyber-attacks in the past few years. To the point where the FTC has stepped in with some pretty stringent privacy and safeguards regulations.

In the past year alone, there have been 6.8 billion (yes, with a B) known records breached in 2,700 publicly disclosed breaches.

Newly enacted rules for dealers around data privacy and safeguards require dealers to notify of data breaches. One surefire way to damage your reputation in the eyes of car buyers is to demonstrate that hackers can play fast and loose with their personal data.

According to the Ponemon Institute, one of the biggest factors involved in cyberattacks on small-to-medium businesses is compromised passwords, with the cost of each attack estimated to be around $384,598 in 2019.

Imagine having to disclose a data breach to your customers. And, with the impact of social media, imagine what an army of cranky customers with large megaphones can do to your dealership’s reputation.

Beyond Reputational Impacts, the Financial Ones are Hefty Too

Dealerships that don’t follow these privacy and safeguards laws and regulations can face heavy fines from the FTC at over $50,000 per violation, which is roughly equal to the cost of an average car on the lot.

What you can do to Protect Your Customers’ Information

The FTC’s got a pretty prescriptive set of requirements in the Safeguards Rule.

According to the FTC, “The Safeguards Rule requires covered financial institutions to develop, implement, and maintain an information security program with administrative, technical, and physical safeguards designed to protect customer information.”

The requirements can seem onerous to folks who aren’t tech-savvy, but KPA’s here to break down the requirements for you.

KPA’s 10-step process to Privacy and Safeguards for Dealers

Mouse over the steps to learn more about each of the 10-steps to Privacy and Safeguards for dealers.

KPA offers a Privacy and Safeguards solution to ensure consumers’ personal information is safe and secure.

Protecting your customers’ information is another essential way to keep their trust.

Fine-tune your written programs, policies, and response plans using a comprehensive library of best practices as your guide. And use testing and monitoring tools to ensure that customer information is locked up tight.

Demonstrate your dealership’s privacy and safeguards practices are top-notch with less effort.

Because reputation is everything.