Wednesday, Apr. 11, 2007, 08:00 PM UPDATED 11:59 AMBy Nick Zulovich
LEE, Mass. — No matter where a store is located, or what type of clientele it serves, several marketing executives interviewed by SubPrime Auto Finance News agree that the best way to drive more "ups" and prospects into a showroom is by taking advantage of all available marketing avenues.
"Multichannel marketing is the future for auto dealers, prime or subprime," John Max Miller, founder and general manager of AutoRevenue explained recently to SubPrime Auto Finance News. "Customers deserve proper communications, expect professionals and personalization."
Daunte Burks, Southeast regional manager for Start Fresh division, went into a bit more depth discussing the current trends impacting the marketing arena.
"I would recommend doing more differentiated types of auto direct mail that is specific to whom the dealer wishes to target," he said. "Television is exponentially losing its effectiveness because of systems like TiVo that allow prospects to avoid being interrupted by commercials they are not interested in watching.
"Newspaper subscriptions are falling lower and lower every year because of the Internet and its ability to keep the public informed on yesterday and today's news, also in most newspaper advertisements, dealers are out to generate traffic by offering a limited amount of vehicles at lower price than their competitor. Direct mail should never have to advertise price to be effective in generating more qualified traffic," he added.
As for radio, Burks said, "Radio is effective, but as with the other mediums of advertisement, the dealer has no control of the market they're targeting in regards to their credit rating, level of income or the make of the vehicle they currently own."
Officials from Direct Marketing Associates concurred, pointing out that, "When it comes to dealerships and their advertising, it is not wise to put all your eggs in one basket. Our experience shows that it's important to distribute advertising spend over several mediums to maximize returns. By using direct mail in conjunction with other advertising programs, you stand the most chance of reaching your target demographic and increasing sales."
Strong Dealer Required for Marketing Success
While Direct Marketing Associates affirmed that a marketing plan should cover a variety of avenues, executives said what is even more important is having a strong dealer backing up what the materials claim.
"If the dealer is not committed to subprime with inventory, advertising budgets and the necessary facilities, you will not be successful," explained Robert Davies, president, and Christine Follett, vice president of sales, for Direct Marketing Associates.
"You can have the most effective marketing in the industry, but if you have no inventory or are running the department behind the dealership in a dirt lot, the customer will not buy from you," they continued.
The company said its marketing professionals will work to create a campaign designed to generate "ups," or it can design a marketing initiative to deliver buyers to a store; however, the key to success is having a dealer who is completely honest about what he is looking for.
"We find we have our best results when the dealer is honest with us regarding their specific situation," the executives told SubPrime Auto Finance News. "If they do not have the lending sources to work with a 24-hour discharged bankruptcy and do not inform us of this, then marketing to this area will not produce results.
"If the dealership is heavily involved in its marketing plan, they will see excellent results. Communication between the dealership and our company is the key to producing desired results," they added.
Capitalizing on the Internet
While it appears taking advantage of a variety of marketing services may be the best course to drive subprime "ups" and sales, officials also noted that one of the most inexpensive and potentially best ways to reach prospective buyers is via the Internet.
"It's clear that all trends show online marketing is becoming the future and traditional marketing is becoming a thing of the past," said AutoRevenue's Miller.
"A lot depends on the demographics of the customer," he continued. "Clearly, the subprime customer's accessibility to e-mail is less than traditional prime customer, but they still have access to the Net at the library or work or home, and it is a great way to communicate with them. Again, a full, multichannel approach works best no matter the demographic."
One of the services provided by Direct Marketing Associates is fully focused on the Internet,
"In addition to mailers, we designed the first bankruptcy marketing system, www.onlinebkmanager.com," Davies and Follett told SubPrime Auto Finance News. "The site is an online program that provides weekly downloads of Chapter 7 and 13 bankruptcy discharges, allowing dealers to individuals before any other dealership can."
Overview of Services
To back up their views that marketing campaigns should encompass a variety of avenues, all three companies interviewed by SubPrime Auto Finance News said their services cover the gamut.
"We are a fully outsourced multichannel marketing company that helps dealers retain customers, increase customer satisfaction and generate more revenue through better personalized communications," said Miller, of AutoRevenue.
The company offers e-mail, direct mail, voice messaging, online appointment scheduling, e-newsletters, data cleansing and e-mail appending.
"When all services are done together, dealers spend a lot less," Miller highlighted. "Due to our core focus being e-mail, we are sending communications by the least expensive mode of communications (LEMOC).
"E-mail should be used first, as it's free; then voice messaging is the next in the inexpensive line; and finally, direct mail is the most costly for dealers," he said. "When managing customers with LEMOC, dealers can invest the least amount of money and receive the greatest amount of ROI."
In addition to providing the online site that alerts dealer clients to recent bankruptcies, Direct Marketing Associates said it also offers traditional direct mail that specializes in targeting subprime prospects by using real-time Equifax data to identify potential buyers by FICO score.
"We are a full-service direct mail provider that mails to individuals that have specific auto beacon scores or people who have Chapter 7 and Chapter 13 bankruptcies," the officials pointed out.
Davies and Follett also offered this advice. "When choosing a direct mail company, be smart. Would a potential customer buy from you if you were curbing cars, had no showroom, no service department and did not invest in the dealerships? The answer is no!
"Do not buy from a direct marketing firm that doesn't invest in their and your success," they suggested. "Tracking the results of campaigns is also important to our customers and we offer a way for our dealers to achieve this. Our 800 numbers provide an easy way to track responses, allowing the customer to immediately see how successful the program is."
As for Start Fresh, Burks said his company offers innovative subprime direct marketing campaigns for both new and used dealers who aggressively want to reach this demographic.
"We've found that targeting people based on their true credit score list, not a blocked list, has consistently produced the best results for more than 4,000 new- and used-car dealers we're fortunate enough to call clients," he explained.
"In today's market, it is a necessity that a dealer be able to accurately track the return they're getting on the advertisement dollar they invest," he continued. "Automotive direct mail marketing is becoming more and more popular because it's classified as permission-marketing, as opposed to interruption marketing like TV, radio and commercials.
"I strongly recommend every car dealer market subprime in their area. Subprime people are more likely to buy used cars that pay a dealer more profit. Subprime clients are not as sensitive to market conditions in comparison to the prime market, and the subprime market is growing rapidly based on divorce rates, lack of adequate health care and corporate downsizing, which means that if you're a car dealer and you're not targeting the subprime market, you better start because your competition will," Burks concluded.
For more information on these companies, visit , and .