Make 2008 your most profitable year ever: Part 1

One tried and true method in the dealer marketing space is the use of mailers to help drive additional traffic to your store with incentives and specials. On the one hand, mailers provide something physical the customer can bring into the dealership; mailers go everywhere and are not policed by spam filters, like emails. This communication method also appeals to the “quiet generation”, consumers born between 1935 and 1945. In some cases, these consumers don’t have an email address and prefer physical mail. But while mailers have benefits, they are also extremely expensive. For example, if you send a mailer that costs 72 cents a piece to 10,000 people, you’ve spent a whopping $7,200 on the campaign (and the costs continue to rise as postal rates increase). In addition, mailers have a low response rate, are often thought of as junk mail and in many cases are thrown out.  Let’s take a look at some the pros and cons of this marketing channel:

 The Pros: 

• Mailed coupons and incentives can physically be brought to your store.
• Reach customers without email addresses.
• No policing of content by spam filters (email) or FTC (phone calls).
• Mailers over the years have been a tried and true method of marketing.

 The Cons:  

• Extremely expensive marketing channel, with increasing postal expense.
• Low response rate. A two percent response is considered average.*
• Generic mailers may not be in line with driver’s needs or tastes.
• Mailers are often thrown out and thought of as “junk mail”.

 Email Campaigns: The Right Marketing Direction?  

After looking over the pros and cons, you may come to the conclusion that perhaps email is a smarter way to market. While email is a timely and inexpensive form of marketing as well, it’s not without pitfalls. Compared to direct mail pieces, email campaigns are a tremendous value. Using the example from above, while one direct mail campaign can cost you $7,200, you can send out several months worth of emails for the same amount and with a higher response rate. Without printing, mailing and production costs, emails are inexpensive, timely and enable your dealership to add ecoupons, links to other dealer departments and promotions as well as multimedia (video) presentations to help drive leads and sales. In addition, this marketing form is widely used by baby boomers and Generation X. (We’ll look at what the lucrative Generation Y prefers later in the series.) However, while emails are easy and inexpensive, many are not delivered due to spam filters (devices on computer networks that block unwanted messages), email addresses constantly change and you have to obtain permission to send them, a timely process for your staff. Let’s delve a little deeper into the pros and cons of this marketing tool.

 The Pros:

• Emails are an inexpensive two-way means to market your message.
• Information can be sent out in a more timely fashion than mailers.
• eCoupons, streaming video, links and other multi-media can be added.
• Email boasts a higher response rate than direct mail (around 16 percent compared to mailers two percent.*)
• Easily update email addresses quarterly through email appending services. (The process of capturing emails for your DMS.)

 The Cons:  

• Emails can be sent from anyone in your organization, without going through proof checks and other processes first.
• Senders have to contend with spam filters.
• Customer email addresses are constantly changing or getting cancelled.
• You have to ask permission to send an email, a labor-intensive task.
• Many customers are frustrated with the glut of “junk email” in their inbox.

These are just two of the channels to consider when looking over your marketing mix. Stay tuned for our next article which details the pros and cons between a Business Development Center and automated calls.

• As reported in the Direct Marketing Association 2005 Response Rate Report

Digital Dealer, Issue 44
November 1, 2007
Vol. 2 Issue 44