5 Tips for Using Data to Increase Auto Dealer Direct Mail Performance
“Big data” is all the buzz right now. Speakers at trade shows, blogs and white papers are all talking about data and how it’s changing the way we run our businesses. When working with automotive dealers across the country, I hear the same two things over and over in regards to auto dealer rerect mail data: Either they have data with no idea how to use it to help increase their response rate, or they have no data at all!
Before you can use data to increase direct mail performance, you have to have some historical numbers to work from. There are two primary ways of doing this. The most accurate, hassle-free way of tracking results is to engage with a marketing company that uses technology to do so. These companies can track walk-ins, phone calls and online traffic generated from your campaign – automatically (like we do here at PERQ). The second way to track response is a little less high tech – whip out your Excel document and track the mailers as they come in. Whichever option you choose the important thing is to track how things are working.
Now that you have some numbers, here are five ways you can use data to increase the ROI on your auto dealer direct mail campaigns:
1. Response by Zip Code
One of the quickest ways to see an increase in response is to pay attention to what parts of your market respond to particular messages. Send your mail pieces to a number of zip codes, and then analyze where the responses come from. When you’ve gathered all your responses, be sure to rank them: find the overall average of response rates and then see which zip codes fell above or below the average.
From here, you can see how each zip code responds to the mail, which allows you to make educated decisions about your next direct mail campaign. Devote more effort to those zip codes that respond well.
Pro Tip: Saturating zip codes with lower responses than the average will end up in diminishing returns, and you may want to consider leaving them out altogether.
Once you know what areas respond well, dive into the demographics in your area and identify new markets that look like your top responders. It’s likely you’ll find some new neighborhoods with a strong response rate.
2. Sales by Zip Code
After you’ve analyzed your responses according to zip code, it’s time to think about the sales coming out of them. You may get a bigger response from one zip code over another, but a smaller number of sales. Find the average sales rate in conjunction with responses to narrow down the best zip codes to send to. As in the above section, if you’re having lower than average sales numbers in a given area, it may be worth spending less in that zip code, or eliminating it altogether.
3. Response by Day
Keep track of when your responses are coming in. Take a look at the traffic generated daily to see how the flow of responses can affect your next campaign. Maybe you send out a large amount of mail one day, only to have the majority of the responses come right after delivery. You may think, “Great—it worked!” And it did get a lot of people to your dealership…all on the same day.
This can be especially tricky when you’ve only got a certain amount of qualified sales professionals in house during that day, and you end up with potential customers waiting entirely too long. This isn’t going to make customers happy, and you won’t sell to all of them. By sending out several drops of mail in one campaign, you’re evening out the amounts of daily responses, allowing your dealership to provide quality attention to more customers over time.
4. Target by Demographic
Sometimes mail marketing simply reaches the wrong people. Some recipients may have low credit or income, making it difficult—if not impossible—to purchase a car. When using saturation lists, it’s a wise use of time to look at the average demographic in a zip code. Look into average incomes and home value. These indicators can help you decide if you need to shift mail routes in order to get the dealer the best marketing strategy with the biggest ROI.
5. Overall Responses between Campaigns
Don’t throw away the data you’ve collected from a campaign after you’ve launched a new one. It’s important to keep analyzing the overall responses between campaigns to make sure that you’re hitting all the right zip codes with the appropriate amounts of mail.
Taking a bird’s eye-view of the marketing campaigns overall will show you how to zero in on the market for the biggest ROI. It’ll give some insight into the behaviors and tendencies of your recipients—like how many days pass before people respond; how consistent the target zip codes are, etc. When you make little changes over time, you can compare how they affected the campaigns individually and wholly. You learn what not to do again and what to replicate.
Having successful mail campaigns over time takes a lot of work. The more data you have available to work with, the more consistent your campaigns will become. If you have additional questions on using the data you have collected, or, on how to begin using data to improve your campaigns please don’t hesitate to reach out. And, of course, if you have interest in automating your data collection and working with an experienced Account Manager to learn about best practices, reach out to our team at PERQ today.