Direct mail has been around for some time and remains one of the best ways to fill showrooms with people. At first, mail piece recipients were chosen by zip code or distance from the dealership. Through the years the selection process has become more precise. Dealerships now select recipients based on income level, lease termination date, college graduation, bankruptcy, home ownership, and most important credit. Credit allows a dealership to only send mail pieces to customers that fit the financing programs available to the dealership. Moreover, mail pieces can be designed with offers that appeal to the selected demographic. The offers made in mail pieces have become more and more aggressive attempting to convince customers to visit dealerships.
Pre-approval sales have grown in popularity over the last several years. Dealers have blanketed their markets with mail pieces bearing messages like, ?Bad Credit, Divorces, No Credit, No Problem. You are PRE-APPROVED at Somewhere Motors.? These messages are extremely appealing to the credit-challenged, and many respond. Unfortunately, a high percentage of these people who were lead to believe that they were pre-approved are no longer approved when they reach the dealership. This is counterproductive for everyone involved. The customer is upset because he/she wasted $10.00 in gas and his day off to visit your store. The sales person is upset because his/her customer couldn?t get approved. And you, the dealer, just had 100 people in the store from a 5,000 piece campaign and less than half even qualified to buy a car.
Over the past 30 years of running some of the largest GM and Ford operations in the country and as a dealer myself, I have used every direct mail company in the nation? if I haven?t used them I have at least been pitched by the, and I finally found a real pre-approval sale with Coast to Coast Direct Marketing.
A second benefit of a real pre-approval sale is the additional sales and gross profit. Consider a 5,000 piece pre-approval sale without a firm offer of credit. If 2 percent of the people who receive the mail piece visit the dealership, they will have 100 ups. Unfortunately, only half will qualify, so even with a 25 percent closing ratio on the 50 qualified ups there will only be 12 sales. Now consider the same 5,000 piece pre-approval sale with all 5,000 pieces going to people who qualify. With the same 2 percent return and the same 100 ups, the results are doubled. Now all 100 ups are guaranteed to qualify, so closing 25 percent will now result in 25 sales. Using an average gross of $2500 per copy, the guaranteed pre-approval sale will gross $62,500. That is an additional $32,500 over the pre-approval sale without the guarantee.
When choosing a company to partner with for direct mail, the three most important things to consider are.
1. The validity and legality of the offer; it is important to have a real deal pre-approval sale.
2. Customer service is king. A partner in direct mail marketing must be able to respond quickly and effectively.
3. The price is also important. The better the price the greater return on investment.
By partnering with a direct mail company that can guarantee the approval of every customer that walks into your dealership holding a mail piece, your dealership can avoid the problems created by the new laws governing pre-approval sales, sell more cars and improve ROI at the same time.
