Killer List Strategies For Your Direct Mail Promotion.

Written for AutoSuccess Magazine
July 2001

By Scott Joseph

If, in your next direct mailing you offered brand new vehicles for only ten dollars, I can still give you five reasons why no one responds to the mailing:

1. Everyone on your mailing list had moved, and so the mail was undeliverable.

2. Everyone on your mailing list couldn't get financed if they paid cash.

3. Everyone on your mailing list is dead.

4. Everyone on your mailing list had a misspelled name, and never even opened the letter.

5. Everyone on your mailing list is Amish.

That last one may be stretching it a bit, but my point is this- the list can make or break a mailing quicker than any other criteria. The best offer in the world will not succeed if the right people don't see it.

Simply, a mailing list consists of the names and addresses of a group of people, but we must consider what we are really doing when we pull a list. We are creating a grouping of people who all have some important characteristics in common. For our purposes in direct mail, these characteristics are purchasing characteristics. They define the buying habits of the individual.

There are only two main types of lists, but thousands of subsets underneath those main types. This variety of possibilities is what gives such amazing power to the list, and also what can cause such difficulty when matching the correct list to the correct offer and presentation. More variables can mean more headaches. We will look at that later, though. Now let’s get to know the two types of lists.

The first type would seem to be the simplest- your own previous customers. In fact, in direct marketing it tends to be an incredibly valuable resource that goes completely untapped. The statistics are obvious- previous customers, people who you have already developed a relationship with, are easier to sell than anyone else, and you almost always make more money with them. So, why are previous customer lists not used more frequently? We usually see two reasons.

One reason is convenience. Your previous customers are grouped together in only one place- your database. It can be a time-consuming, expensive headache for dealers to clean-up their database enough to make a direct mail campaign worthwhile. If one household has records of a purchased vehicle in sales and three oil changes, but their names or address were entered differently each time, you could easily waste time and money mailing four mailers to the same home.

What is worse is that if you do mail four times to that home, you have just told that household that you do not know them well enough to know that Elizabeth Browning is the same person as Beth Browning, and that you do not know their neighborhood well enough to know that West Blackburn Avenue is the same as Blackburn Avenue. Instead of reconnecting with the customer, you have just alienated them.

The second reason that previous customer lists are not used more frequently is a misconception that your previous customers are already all wrapped up. If they already own one of your cars, why should you try to sell them again? Over the past ten years, we have worked with thousands of dealers, and many believe that they should ignore their previous customers in favor of conquesting prospects. Their logic is that the previous customers have already purchased from them, so they will come back to purchase again when they need to. The reality of this situation is that most households have more than one vehicle, and only a minority of those households purchased their vehicle from the same dealership. If you feel the need to conquest, conquest that other vehicle from a customer that you already know!

Generally, digging into your customer database and attempting to clean it up yourself can be a huge pain. However, any reputable direct marketing company can turn that data into an incredibly profitable promotion. Even if you don't know how to put all the information on a disk, the marketing company can directly dial into your system, download and cleanse the data, and send everything through National Change of Address to ensure the highest deliverability. It is an inexpensive investment that can give you a valuable tool to work with. You are already sitting on a goldmine- just let someone else do the digging for you.

The second type of list is a compiled list, one that you purchase or rent through a list broker or a marketing company, which is grouped by whatever purchasing characteristics you choose. You can select from demographics, automotive registrations, credit (FICO) scores, or thousands of other criteria.

How do you choose, when this category is nothing but variables? How do you decide what is important? Are you selecting by income? Vehicle registration? Age? Marital status? Zip code? Previous buying habits? Presence of children? Age of present vehicle? Individual credit score? Purchase date of present vehicle? Loyalty to brand?

The simple answer is this- align the offer, creative, and list, and the mailer will be successful. Never forget that customers are purposeful human beings with goals and interests, and a distinct purchasing behavior.

Keep your goal for the mailer in mind, and make sure that everything else falls in line behind that. If your goal for the promotion is to sell 35 vehicles and reduce your inventory, you probably won’t care if the people you are mailing to have kids or not. However, if your goal is to reduce your minivan inventory, then the presence of children in the home is extremely important. Similarly, some dealers send direct mail to homeowners only. This decision largely depends on where your dealership is located. If renting is the norm in your area, don’t ignore those people! In fact, they may have more disposable income to spend on a new vehicle.

Let the type of promotion you are building guide your choice for the list. Never the other way around! Consider the following possibilities: if you are doing a payment promotion, target people who finance. If you are trying to increase your secondary financing sales, target people with sub-prime FICO scores. Use lists of people who are more than halfway through their leases to boost your lease sales. Or, have your direct marketing company profile your existing customers to see what demographics you should mail to, so you can find your next customers.

Whatever direction you take with your list, remember the golden rule of list building- Try to appeal to everyone and you appeal to no one! If you attempt a broad, scattershot mailing, your effort will loose focus, and the mailer will most likely fail. Keep your goal in mind- the goal is not to get 5,000 letters into the mail stream; the goal is to get vehicle sales. Zoom in on your target audience, give them a killer offer, and make sure the creative supports the effort. Then just watch the customers roll in, and the cars roll out.

Next month: How to Make Them An Offer They Can't Refuse!

Read a past AutoSuccess article:

April 2001:
Seven Advantages of Direct Mail for the Automotive Industry

June 2001:

Testing and Measuring the Effectiveness of Your Advertising to Improve Your Profit

September 2001:
How to Make Them an Offer They Can't Refuse!

October 2001:
The Secret of Out-Performing All Your Other Advertising!

November 2001:
The Number One Strategy to Out-Market Your Competition

December 2001:
Creative That Gets Results!

January 2002:
Secrets to Improve Your Sales and Profit With Direct Mail

February 2002:
How to Sell One to Two More Deals for Each 100 Pieces of Mail You Send!

March 2002:
The Seven Biggest Marketing Mistakes Everbody is Making, and How to Avoid Them!

April 2002:
Business Rules to Grow By!

May 2002:
The Only Three Ways to Grow Your Business

June 2002:
Your Customers are Speaking To You. Do You Hear Them?

July 2002
How to Attract Quality Traffic

August 2002
Make Money on Your Sales Event Before it Even Begins!

September 2002
Marketing Lists That Work!