What advertising or marketing generates a 1% sold rate?
How do you or your marketing agency measure the success of your direct mail marketing? Is it the response rate — or its “sold” rate? Which measurement is more meaningful to you?
Strategic planning is essential to ensure that your marketing investment will return the highest possible ROI. Beware of those who insist or attempt to persuade you that the quantity mailed is the key to driving showroom traffic.
The ability to measure this success is a standard requirement every dealer should impose upon any direct mail vendor they hire. Without the ability to measure a campaign, how will you or your agency determine whether the campaign was successful? Select only those direct mail vendors or agencies that track response and measure sold rate and ROI. This will ensure that they are held accountable for the results they promised during the sales pitch. Requiring total campaign transparency will help maximize your marketing dollars. This also will allow the opportunity to fine tune future initiatives by making the necessary adjustments to be confident that you’re targeting the right audience, with the right offers, at just the right time.
Choose your marketing partner wisely. Know to whom you’re giving your data or to whom you are providing access to your DMS. Request in writing what measures this marketing partner has in place to protect and guarantee that your most valuable asset, your customer data, is never shared with, sold to, or used for the benefit of a competitor in your market area. Sharing of data is more common than you might suspect. It should never be tolerated.
Response vs. sold rate
Direct mail response rate depends on a combination of strategic targeting, credibility of message, impactful offers, timeliness of delivery, and personalization. It’s important to note that even the best targeting capabilities and the best-of-breed direct mail strategies cannot deliver the results and return on investment that highly personalized, micro-targeted, direct mail marketing can achieve.
There’s simply nothing more powerful than having the ability to communicate to your existing customers offers that are specific to them and that provide them with options that exceed their expectations. Given such offers, they are more likely to make an impulse decision to take advantage of an opportunity that exists for today or one that helps them recognize a potential issue they may be at risk of incurring — if they fail to act now!
This kind of direct mail targets and provides proactive answers to recipients’ unstated questions. Properly analyzed, its success is not focused on response rate, but sold rate. A well-executed direct mailing like this routinely results in 10 units sold for just 1,000 pieces of mail sent – a whopping 1% sold rate!
By following the direct mail marketing guidelines outlined above, Capital Ford of Raleigh not only consistently sells more vehicles every month, but is also acquiring an abundance of the finest retail trades available in their region. As the largest volume Ford dealership in the Southeastern U.S., Capital Ford of Raleigh has proven that micro-targeting, the newest direct mail marketing available to automotive retailers today, is driving incremental sales and increasing average grosses per unit to levels they never experienced.
“This new micro-targeted, customer centric approach to direct marketing is now the key to helping us consistently increase our sales numbers,accounting for about 75% of our leads,” said Mark Keeler, Customer Retention Manager for Capital Ford of Raleigh. The North Carolina dealership sells about 600 new and used vehicles a month.“With a year-to-date cost of sale at $92 and a closing ratio of 1.3%, I cannot think of a better performing medium!” he added.
Effective because it strikes an emotion, often resulting in impulse decisions
Driven by specific, analytic opportunities created within a dealer’s customer database, recipients of micro-targeted messages and offers are provided with answers to pertinent questions, many months before they are “in the market” or ever thought possible:
- Can I afford a new model?
- How can I get by with this small car given my new family addition?
- How much longer will this vehicle last given its service history?
- Am I driving too far and going to experience mileage penalties in my lease?
- My car is out of warranty – how can I have driving peace of mind?
Micro-targeted direct mail eliminates wasteful spending, yet increases response, resulting in a substantial reduction in a dealer’s marketing and advertising expense, while delivering the highest ROI possible today.
If your recent direct mail campaign did not achieve the results you were promised or expected, or if your experience through the years with direct mail proved fruitless, now may be the perfect time to renew your interest in direct mail, this time with specific objectives in place. Simply choose a direct mail agency that employs the “best practices” I have outlined above, which virtually guarantees results. You can become a believer once again, in what still proves to be one of the most powerful mediums available to automotive retailers today!