Skip to Main Content

Automobile Offer Letters are Ideal Direct Mail Marketing Piece for Dealerships

Posted by Brian Berg Google+

Targeted automobile mailing lists are the perfect lead generating and ROI producing marketing forum for an array of automotive offers especially for automotive dealerships.  For each targeted direct mail marketing campaign delivered, on average, thirteen incremental sales at a cost of just $112 per vehicle sold were produced by automotive dealerships.  This is almost 80% less than NADA’s current $616 estimate of the amount dealers typically spend advertising each car they sell.

Most of a dealership’s marketing spends goes to attracting new customers, while the potential incremental profits sitting in their databases are often overlooked.  This shows that one of the oldest, tried-and-true marketing methods in the book, the humble direct mail piece, leads the way when it comes to ROI and retaining current customers.

In addition to the incremental sales, dealers also saw an increased gross profit per car sold to these customers, on average the gross profit was $422 more than that of a first-time customer sale.  And, because equity marketing nearly always results in a customer trading their one-owner vehicle back to the dealership, trade-ins generated from targeted direct mail campaigns are highly profitable and sell through faster than typical pre-owned vehicles: 64% of trades sell within 30 days of being on the lot vs. 37% for non-repeat sale trades.

Though customer data exists, unearthing in-market, often orphaned, customers from can prove difficult and then there’s OEM information and used car valuations to add into the mix.  Just as challenging is the creation of effective marketing communication materials. 

Some dealerships turn to their CRM tool for great leads.  A salesperson or Business Development Manager must do it all, including setting the CRM search parameters and then communicating with customers by phone, e-mail or while they are in the service drive; tasks that often get relegated to the bottom of the “to-do” list.  In addition, neither solution includes a strategic, targeted direct mail marketing component that provides regular and consistent communications to the customer, nor can they tie offers to current manufacturer incentives.  And, crucially, they fail to take into account the dealership’s current inventory needs.

Instead of depending on sales staff to reach out to these ready-to-buy prospects,  dealers are better off to apply personalized, targeted direct mail as the first point of contact in their in-equity marketing campaigns.  “Offer letters” – based on current inventory needs and OEM incentives – are sent to in-equity customers.  The list is built by pulling actual data from the dealer DMS and other sources.  The data is then examined and ideal targets are chosen for their mathematical fit by looking at payments remaining, the exact interest rate being paid and the true wholesale value of their vehicle.  Using this data, a “go shopping price” is determined, giving the customer the exact value of a new vehicle they can trade up to while retaining their current payment with no money out of pocket.  This frees salespeople up to do what they do best, sell cars, and ensures customers are being touched on a regular basis through an automobile mailing list offer.