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Direct mail might seem like an outdated and out of fashion marketing tactic, but dealers using it effectively are having the last laugh: consistently reporting an average of thirteen incremental new car sales per month by targeting customers who are “in-equity” in their current vehicle.
A recent study of over 200 US dealerships using personalized direct mail for strategic, targeted campaigns showed that, with a minimal spend and little hands-on work by dealership personnel, dealers are experiencing huge ROI – moving customers into new vehicles with little or no out-of-pocket spend and getting great trade-ins as a result.
It’s important to understand how best to find those customers who are “in-equity” – you can’t simply rely on length of ownership as customers are often upside down in their vehicles, instead it’s important to do extensive database mining to find those customers who’s cars are worth more than they owe, despite how long they’ve owned it.
All the dealers in this study used a full-service, turnkey equity marketing solution that initiates customer contact with personalized, targeted direct mail – followed by email and calls from salespeople. And the impact was huge.
The targeted direct mail campaigns that deliver the strongest results were customized to focus on the specific needs of the dealer. For example, a “Year-End Clearance Event” helped move end-of-year overstock; or campaigns focused on moving a certain model; and, if a dealer was looking to fill up their lots with certain used vehicles, campaigns would target these specifically.
The results were an average cost per sale of just $112 per new vehicle sold – far less than any other marketing channel. And the huge benefit is that by communicating these offers, you keep your current customers close and don’t lose them to other dealerships.
Targeted, direct mail to in-equity customers works because the messages are personalized and customers are provided a “go shopping” amount that they can immediately put to use. And, because you’re talking to current customers, gross profits end up being much higher than that of a first-time customer – averaging $422 more per vehicle.
Isn’t now a good time to reconsider direct mail in your marketing mix?