Special sales events promoted by targeted direct mailings can boost monthly sales by 25 percent while increasing gross profit by as much as 100 percent. One key to their success is pre-qualifying the customer.
Excerpts from the article by C.D. Bohon
"Whenever they come in we see sales increase by 20 to 25 percent and gross profits by 40 percent," says Tom Tepe, dealer principal of Tom Tepe Auto Center, Milan, Ind. Milan is famous for having the high school basketball team portrayed in the movie "Hoosiers." Tepe, a multi-line GM dealer, tapped one of several companies that specialize in promoting and in some cases running, high-profile sales events.
Mike Duea, president of Duea Motors, Albia, Iowa, did, too, and was pleased with the results. "The people we get from the promotional mailings don't come in for the giveaway, they come to buy." Both unit sales and gross profits are up "substantially" as a result of the special sales events, he says.
Scott Joseph, president of J&L Marketing, Louisville, KY., a firm specializing in "event" selling, defines what his company does for dealers as "a lead generating business. We acquire customers." He notes that too often a dealer will spend money to promote a sales event, but the sales staff is not prepared to handle the customer overload and so much of the advertising effort is wasted.
"We call and prepare the managers and sales force for what to expect, so that when they start getting calls responding to our direct mail solicitations, for example, they know how to respond."
Joseph notes that since the typical dealer runs so many promotions, the sales staff often becomes jaded and gives the impression to a customer that the event is no big deal, destroying the customer interest. "That's why we use Promotion Coordinators at our sales events - to make sure nothing like that happens," he says.
While most might believe that a one-time special sales event could work once, follow-up sales events might be expected to do less well. But that doesn't seem to be the case.
"We get the same results every month," says dealer Tom Tepe, who has hosted specials sales events every month for a year and a half. He notes that one or two events didn't do quite as well as the others - but not because the public was jaded. "The only important people to reach are those who are in the market to buy a car that week. If you're not shopping for a car, you ignore the promotion." Thus, the event is fresh for every new customer.
Scott Joseph of J&L Marketing has some dealer customers who repeat sales once a month year after year with no diminution in results. Louisville's Green Tree Toyota, for example, has run a special sales event once a month for eight years. Normal monthly sales, excluding the special sales event, average 200 a month. The special sales event adds another 150 cars and trucks, year in and year out.
Joseph's company tracks every sale and provides detailed historical sales data to clients. "I can look at every single person that every sale has attracted. I can show that, for example, 1.5 percent of those receiving mail came in, 48 percent planned to trade, 47 percent had a clear title, etc., etc." Mailings by J&L are fine-tuned to the customer, whether lease, new vehicle, used, good credit, poor credit, etc. Each mailing is personalized and the company uses its years of direct mailing responses to determine the most effective marketing program for an individual dealership.
A typical response analysis from J&L, this one for Doug Stanley Ford, DeSoto, Texas, shows that 20,000 invitations to the special event were sent out, 332 were returned in person and 55 vehicles were sold. Additionally, the analysis shows that of the 332 "ups," 210 had trades, 71 had clear title to their vehicles, 134 were interested in a new car and 109 in a used, 158 had never been to the dealership before, 60 had bought from the dealership before and 124 were service customers.
Joseph notes that many dealers dismiss the value of direct mailings because they assume they have control of their primary market through their normal advertising. But he has found that as many as half of those sold vehicles through direct mail promotions have never been to the dealership before. "I could mail into a dealer's back yard and easily get 40 percent responding who'd never even heard of the dealership."
"We acquire customers"
"Mailings by J&L are
fine-tuned to the customer"