The Internet has provided us with an ability to create mailers and send them en masse, with basically the push of a button.
Auto makers also have discovered direct mail's value in driving traffic. They have developed programs for the managers to create an “on demand” mailer. The program is a “point and click” approach where the manager can develop an effective piece in minutes.
Some OEM's have training sessions on the effective use of these programs and the “take rate” by the dealership managers has been overwhelming.
With this readily available tool are challenges. In many stores, the manager has turned the customer into a coupon junkie. The customer will not come to the service department until he or she gets a coupon.
Add to this, the coupon has deeply discounted prices which erodes the gross profit percentage on parts and labor. What makes it even more challenging is the coupons are sent to current customers.
I have viewed many Internet and snail-mail advertising pieces over the years and have found a few common techniques we should reconsider:
One Size Does Not Fit All: Big catalog companies know our buying patterns. If they know we are a seasonal buyer, they will send catalogs or mailers during the season in which our pattern says we buy. If we are regular customers, they keep their names in front of us regularly with minimal discounts. If we are discount buyers, they forward special close-out type pieces.
Why can't we do this? Send a different mailer to a “Do it Yourselfer” than you would to a regular customer. How about lost customers? Send them a mailer that focuses on trying to get them back in the store, maybe with a special or a discount offer.
Measure Results: The mainstay measurement for years has been based on the percentage of return. If we send 10,000 mailers out and got 200 returning, we have a 2% return, and that's acceptable in most cases.
I would ask that you also measure the actual business sold as a result of the mailer. Measure the value of the repair order. Add a measurement: “Return on Investment.” I have seen direct mail campaigns get 4% or 5% return and the ROI was minimum.
Don't Automatically Discount: I was conducting a meeting where a manager presented a direct-mail piece that was outstanding. The art work was good; the message was timed to the needs of the customer; it was multi-colored on good quality paper, with several clip-out coupons.
I asked her if the prices were discounted. She said, “Well, yeah,” like, “You dumb bunny, why would you ask that?” This is the attitude of a lot of managers. But why discount and give away the gross profit when maybe you don't need to. Whoever said the coupons had to be discounted?
I have seen managers experience successful campaigns that advertised their everyday price. We need to rethink the discounting practices.
Why are we focused on 10% off or a low, low price on an oil change? Check out the colored section of your local Sunday paper. Read the ads closely. A lot of the items offered are not discounted at all. It's the image they project.
Test it in your operation. Try two campaigns, one discounted and one with everyday low prices. Measure the results. You likely will not see a difference.
Two More Tips: Include oil and filter changes in all ad campaigns. Your customer will generalize your pricing based on the one operation they can compare prices on. If this price is comparable, then all of your other prices are considered competitive.
Don't include expiration dates. Most mailers have them. Why? There is no evidence that brings people in faster, if at all.
These techniques challenge our traditional thinking. Give them a try. You may gain more gross profit than before.
Lee Harkins, president of ATcon in Birmingham, AL, is a dealership management consultant and industry speaker. He is at 800-692-2719 and [email protected]
