The Shortest Distance Between Two Points is Direct Marketing

In today's fragmented marketplace, new marketing strategies provide cost-effective alternatives to indirect media. Do you still spend thousands of dollars every month on mass marketing tactics that don't add measurable profits to your bottom line?

Do you still rely on indirect media such as print, TV ads, and radio to drive traffic to your showroom when you should be running direct marketing campaigns that can increase sales by 20 to 30 percent or even more?

According to a recent NADA analysis, spending for newspaper ads dropped from 52.2 percent of total ad dollars in 1996 to 27.3 percent of total ad dollars in 2006. That is a drop of nearly half in just ten years, the interpretation of these numbers is pretty simple; it shows the inability of newspapers to deliver results.

Over the very same period, spending for radio and TV ads increased, but not by much. The marginal gains of radio and TV resulted mainly from advertisers bailing out of newspapers and not yet adopting online or email marketing mediums.

Auto retailers now spend 10.2 percent of their marketing budgets on direct mail and 11.5 percent on internet advertising; a category which wasn't even measured back in 1996. You can count on those percentages to increase as more dealers discover the power of both online and offline direct marketing strategies.

Think about how much you spend on marketing and advertising each month- then ask yourself these questions:

• Do I really know which of my marketing tactics are working and which are not?
• Do I know how much I spend on marketing to generate a sale?
• Can I trace a direct link between the marketing dollars I spend and the vehicles I sell?
• Do I know who responds to my marketing campaigns?
• Do I keep track of prospects as they move through my sales process so I can market to them even more effectively?

You can't use yesterdays marketing tactics to compete in today's hectic marketplace. Your business will bankrupt before recouping a fraction of your investment. You can, however, easily leverage the information sitting in your database to create sharply focused campaigns aimed directly at the most valuable customers in your market.

Here is the best part: You already own the information in your database. With a little extra effort and the right technology, you can turn that data into an everlasting gold mine. For example, you can target micro-segments of your audience based on vehicle mileage, value, and service history. You can slice and dice your database to generate direct marketing lists based on CSI responses, manufacturer incentives, birthdays, and graduations.

You can market directly to customers who haven't visited your service department in the past six months. You can target customers who are near the end of their loan or lease. You can reach out to customers who bought from you in the past and have no more than $2,000 negative equity in their vehicle. You can do all that and more by using the information in your customer database.

However many dealers are still afraid of technology. They think of it as another money pit. In my opinion, the timing has never been better for dealers who want to build up their database marketing capabilities. The price of technology has fallen steadily while its value has risen dramatically and each new generation of technology is easier than the previous one to use.

For the cost of a single ad campaign in a traditional media, you can run dozens of highly-effective direct marketing campaigns via mail or telephone. You can even run hundreds of tightly focused campaigns via email. In addition, were only beginning to see the impact of mobile telephone marketing. Today's technology enables dealers to create their own sets of automated business rules and custom-built marketing campaigns that generate margins far greater than their costs. If you're still not entirely comfortable with database technology, knowledgeable vendors are waiting to help and support your direct marketing efforts.

Your most profitable customers are the ones you already know. Use the information locked up in your database to entice those customers back to your dealership. You will be amazed at the additional revenue you can generate when you market directly to loyal customers.