Having established a solid foundation of qualified personnel for the Special Finance Department, the next step toward success is clear: reaching the non-prime customer demographic. These customers pose a particular challenge, though. The dealership must effectively reach the non-prime market without creating the perception that it is unsuited to serve prime customers. In addition, this carefully crafted campaign must be kept within budgetary constraints (obviously, the amount spent on capturing a lead can’t exceed the potential profit that leads represents). In the end, how successfully a dealership can reach its customers comes down to one thing: marketing.
Utilizing Different Media
Marketing refers to any of a diverse group of activities which can be used to promote a dealership. Oftentimes, marketing is performed through specific advertising, promotions and sales. Good marketing and an adequately budgeted advertising campaign is necessary to attract customers to a dealership.
Marketing is not a static undertaking, though. A promotion which yields excellent results one month may be inadequate the next. Once a campaign is in place, advertising should be routinely analyzed in order to verify its effectiveness. The advertising campaign should consistently generate and capture a high quality of leads with quantifiable results (how many sales were actually generated from the campaign). In general, the ideal budgetary range for special finance advertising runs from four to six hundred dollars per deal. By distributing advertising costs to each deal, the dealership would have an advertising budget built in without incurring out-of-pocket expenses.
There are various avenues available for reaching special finance leads. This includes such media as direct mailings, internet advertisements and websites, outdoor billboards, print media, radio, TV commercials and infomercials. Through any one of these sources, the special finance department can be advertised and promoted sufficiently to get the message across that people with credit challenges can be helped. Many dealerships opt to integrate “blind” advertising into their non-prime marketing campaigns. This means the campaign directly targets non-prime customers without disclosing the name of the dealership. Such ads are often structured as an invitation to help the customer fix their credit. Blind advertising keeps the dealership’s name anonymous which protects dealer’s reputation and brand image.
Television, print media, radio, billboards and the internet reach the entire market without discretion to credit quality. The lead quality can be improved by putting qualifiers in the ads, but still you get the good along with the bad and will work through a larger number of prospects to find the sales.
Today, with proper database marketing, the credit and demographic attributes can be analyzed for the overall market and customers. Dealerships can easily determine which advertising campaigns are effective and which ones aren’t. They can profile their customers and analyze their market to figure out the prospects that are available for targeting.
800 Number
A toll-free number is a must in a Special Finance Department’s marketing. This number can be utilized in a number of ways: callers may be directed to an automated lead service, a live representative, or directly to the dealership. The volume of calls will largely determine which option is best suited for a dealership. As with most marketing strategies, at least some experimentation may be required. Many dealerships find that having more than one toll-free number, and therefore more than option for customers, is the best way of capturing the market.
These numbers assist the Special Finance Department in tracking the leads generated by its advertising efforts. Automated lead service companies offer detailed call reports that will help dealerships determine not only who called, but also the source. This is a straightforward method for pinpointing exactly how well you are penetrating the non-prime demographic.
Too often managers do not properly track the success of advertising dollars spent, simply because they overlook the daily or weekly call reports. Successful managers make this a part of their weekly routine by taking time to analyze dollars spent vs. results – you can’t manage what you can’t measure.
Targeted Direct Mail
Direct mail is an effective way of marketing to special finance customers, especially when the mail piece displays a toll free number to call for pre-qualification.
Targeted direct mail advertising pre-screens prospects based on credit and improves the non-prime results. It is possible to pre-screen the market by accessing actual credit data. Pre-screening the prospects before advertising greatly improves the results.
In the targeted direct mail advertising, the key is testing. Without analysis, your direct mail campaign could simply be repeating failed methods when it could be capturing a large number of non-prime customers.
The following elements are essential to a successful direct mail campaign:
Mailing List – In direct marketing, the mailing list is not just a way of reaching the market, it is the market. Matching the right audience with the right offer should be the goal. The data must be fresh, properly filtered and managed to maximize sales without burning out the market.
For example, if you are mailing to a bankruptcy list, you need to pay close attention to the amount of time that has passed since your prospects received their discharge papers. If most are very recent (within the last 24 months), you may be wasting your money. When using a demographic list, pay close attention to the age, income, gender, and presence of children for most of your respondents. Adjusting just one attribute in any of these lists could have a huge impact on your response rates.
Design of the Mail Piece – The mail piece design must create a consumer confidence and consist of an offer the prospects will want to respond to.
Envelope – The envelope’s job is to get the prospect to open it and read the enclosed offer. The most important part of this to make sure that the envelope doesn’t scream “junk mail” or the offer could end up in the trash without ever being read. This wastes money on the mail piece itself and costs your dealership a potential customer.
Special Offer – To be successful, a direct mail should sell the offer, not the product. The offer should be stated in a way to increase the prospect’s response. The offer should be worded with the targeted audience in mind and must be easy to respond to. For example, special offers which ask the prospect to call an 800 number have a much higher response rate than offers which invite them directly to the dealership. You may further increase the response by offering a gift. If the gift is only given with a purchase, you may not only increase response but also increase the percentage of sales.
Delivery Method – There are different choices for sending a large amount of mail through the postal system. It doesn’t matter which one is utilized, as long as it reaches the target audience in a timely manner that corresponds with the advertising campaign. Obviously, it would be pointless to send the mail out in a way which means it won’t be delivered until after the sale is over.
Follow Up – Direct mail followed by telemarketing generates two to ten times the response than that of a similar campaign without telephone follow-up. There are proven techniques in follow-up that insure success. Make sure your mail company is using them.
The right combination of these elements could double the direct mail response. Test every step of the process to come up with the best combination. By consistently reviewing and adjusting your technique, you can greatly increase the number of vehicles you deliver each month. This applies to whatever form of marketing you’re using. No matter what the form, marketing must be constantly analyzed and refined to ensure you are reaching your non-prime demographic.
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