Over the past decade, internet marketing and advertising have overtaken direct marketing as many business’ primary forms of advertising. According to eMarketer, online advertising spending has grown more than 13% each year since 2003, rising from a $7.3 billion industry in 2003 to a projected $36.5 billion industry in 2011. Automotive dealerships and retailers, which tend to rely on more traditional forms of marketing and advertising, have begun to shift their advertising dollars into the digital realm as well.
But are internet marketing strategies really more effective than traditional marketing, such as direct mail, for auto dealers? To be sure, online marketing strategies such as PPC advertising, social media marketing and search engine optimization (SEO) are becoming more popular, but is this due to simple popularity trends or is it because traditional advertising simply doesn’t work anymore? After all, just because consumers spend more time online today doesn’t mean they don’t continue to receive snail mail or watch television.
While there are no clear answers, recent statistics and direct mail marketing response rates in the automotive retail industry shed some light. According to the Direct Marketing Association, in 2007 auto retailers averaged a $33.81 ROI for every dollar spent on direct marketing – a healthy margin. A 2010 study by the DMA showed that various types of snail mail averaged the lowest overall cost per lead – lower costs than those reported for digital advertising. Direct mail catalogs showed the lowest overall cost per lead or order, at $47.61, followed closely by direct mail inserts at $47.69 and mailed postcards at $75.32. The same study showed that direct mail letter-sized envelopes had a response rate of 1.38% when sent to prospect lists, a figure more than doubled for house mailing lists.
The bottom line: while it’s not wise to rely on direct marketing strategies alone, direct mail marketing clearly continues to be a viable, cost-effective strategy for gathering new business to auto dealerships and retailers. Of course, there are many variables that go in to a direct mail marketing campaign that make it more – or less – effective!
Here are a few tips for automotive dealers and retailers looking to make the most out of their direct mail marketing campaigns:
Make the offer more tantalizing and urgent. Studies have shown that consumers respond more to offers that contain a coupon or limited time offer. By narrowing the offer’s window to a specific time frame and making the deal juicier, consumers are more likely to act, rather than procrastinate.
Add key mailers to direct mail pieces. Key mailers, combined with “lucky key” contests, are a proven way to drive more customers to your dealership location. After all, who can resist the opportunity to win a new car? Once on your location, your showfloor deals and sales staff can do the rest.
Make it easier for customers to respond to the offer. Direct mail pieces should make it crystal clear exactly WHAT they want consumers to do, and how they can go about doing it. Make calls to action eye-catching and clear, including easy-to-follow instructions such as a website landing page URL, a toll free phone number or both.
Use newspaper inserts. Studies show that direct mail inserts offer the second lowest cost per lead, and they can be a great opportunity to get new customers onto your show floor. Try offering a “number match” offer on insert pieces which require consumers to visit your dealership location in order to see if their scratch-off numbers are a winning match.