Mark Fretwell – Product & Marketing Director, Chrysalis Loyalty.

New regulations governing the use of customer data for marketing are still widely misunderstood across the automotive retail and finance sector, even since GDPR came into force.

That’s the view of customer retention specialists Chrysalis Loyalty, who say confusion is still evident from their conversations about customer renewal and retention marketing across the industry.

The main area of uncertainty, says Chrysalis Loyalty Product and Marketing Director Mark Fretwell, is around reconciling direct marketing activity with the principle enshrined in GDPR of ‘legitimate interest’.

Chrysalis is encountering a widespread misconception that ‘legitimate interest’ is a one-sided principle relating to the data subject’s interests, when in fact GDPR guidelines specifically provide for the supplier’s right to conduct  direct marketing activity in given circumstances.

It means that many motor retailers are now seeking clarity after receiving often conflicting interpretations from lawyers and other partners.  In some cases there is a possibility that the confusion may result in less rather than more transparency in the communications between dealers and customers – and in some cases, communication activities have been suspended unnecessarily.

Chrysalis believes that a crucial message has been lost in the legal interpretations of many businesses; that in almost all scenarios where a finance agreement already exists there is a legal basis for maintaining ongoing customer contact – often even in the case of ‘lapsed customers’.

Mark Fretwell said: “There remains a lot of confusion over GDPR and especially over the meaning of ‘legitimate interest’ as a basis for contacting customers. It appears that many businesses have been reacting to GDPR as if the new rules infer that direct marketing does not fall under the banner of ‘legitimate interest’ when in fact it is clearly provided for in the regulations.

“It is perhaps no surprise that confusion has led to an over-cautious approach in some quarters because of conflicting legal opinion over what constitutes an ongoing right to remain in contact with a customer.

Chrysalis welcomes the new regulations and believes that eventually the confusion will clear leading to greater understanding and professionalism in this industry. The company points to the message from the UK Information Commissioner, Elizabeth Denham, who recently said: “We are going to be focused on businesses that deliberately, persistently or negligently misuse data. Some people are so concerned about being caught out by the new rules that they appear to be assuming marketing directly to consumers is no longer a lawful activity without specific permission. The reality is that what matters is providing a clear opportunity to opt out of such communications and then respecting that decision.”

Mark Fretwell said: “Under Financial Conduct Authority guidelines lenders have a duty to act in the best interests of their borrowers and at Chrysalis, we have always led with a ‘customer first’ approach, so this is the basis with which we have always approached our platform solutions and decision-ware. Therefore, we welcome the renewed focus GDPR brings to the industry. It is clear that informing a customer where they are in their trade cycle; in some cases perhaps having to inform them of pending excess mileage charges – or more often, what beneficial opportunities they have to renew their current car – falls under such a responsibility.

As a substantial holder and processor of customer data for renewal marketing purposes, Chrysalis proactively sought written advice from a leading QC in the area of European privacy and data law to ensure clarity for the business and its clients on the new rules. The company concluded that GDPR compliance generally reflects ‘best practices’ which most businesses should already employ.

Specifically the company looked at 6 scenarios on behalf of their finance company clients:

  1. What preparations will allow our clients to be able to process and directly market to their finance database in order to make contact for such purposes as beneficially managing the customer trade cycle resulting in customer contact at both early renewal and maturing contract phases, for new customers post GDPR introduction?
  2. What preparations will allow our clients to continue to process and contact existing customers for both early and maturing renewal as part of beneficially managing the trade cycle, post GDPR introduction?
  3. Will our clients be allowed to contact existing customers if re-solicitation permissions were previously set to ‘no’ in the existing database pre-GDPR?
  4. Is re-permissioning a necessary action our clients should be taking?
  5. If re-permissioning is undertaken by an associated party in relation to the data subject, eg: by the brand partner, and the customer does not respond, is our client able to continue to process the customer’s data for renewal contact and if so on what basis?
  6. How can our clients prepare so that they can continue to process data for and contact lapsed finance customers post GDPr introduction?

In conclusion, Mark Fretwell said: “The advice we received is clear, that in most scenarios where a finance agreement exists there is a legitimate basis for maintaining ongoing customer contact – even with ‘Lapsed Customers’.

“Where software systems are used to generate customer communication opportunities this in fact provides an opportunity for dealers and funders to demonstrate both their compliance and the quality of their decision making in supporting consumers’ best interests. It enables them to clearly show that they are treating customers fairly, contacting the customer when it is in their interests to do so rather than when a business is over-stocked or missing its sales target – and enables demonstrating clearly and transparently the basis for decision making. It is an opportunity for the industry to promote and improve its reputation and professionalism.”