|Direct mail is a staple of automotive advertising. It’s hard for me to admit, but it still seems to be the cornerstone of most dealers’ annual marketing initiatives. Dealers swear that direct mail is one of the best and most effective forms of advertising available. While direct mail can be a very successful medium to use in order to build traffic in your dealership, it can also be a colossal waste of money if not executed properly. In today’s competitive marketplace, most direct mail campaigns are destined for failure, even before the drop occurs. Why? Because so many dealers don’t realize that direct mail campaigns are only as good as the mailing list. The response rate and overall success of the campaign depends on two things: the age of the mailing list and what source was used to acquire the list.|
Sometimes even the best conceptual direct mail campaigns don’t deliver the results you hope for. With all the money you spend, you obviously want big returns, so the mailing list should always be the focus. Most direct mail companies offer mailing lists that were acquired via list brokers or what some call resellers. Lists from brokers can often be the kiss-of-death to your campaign. There are two major flaws that are inherently attached to brokered lists: they are often very aged and they are frequently recycled.
Let’s examine the importance of having an up-to-date list. Since many of you target customers have less-than-perfect credit, you should first understand that the addresses and phone numbers of “secondary” customers change more often than primary customers. If you don’t have the correct address for a prospect, it defeats the purpose of your campaign. Your message will most certainly miss the target more than it hits. Some lists can contain as much as 25 percent or more outdated and incorrect information. Think about how much you’re paying per piece for your campaign, and you can see that you’re wasting a significant amount of money mailing to people who will never see your mail piece.
Another major problem is that list brokers sell single product lists. Therefore, it only stands to reason that they want to sell each list as many times as they can to make as much profit as possible. This means that very few direct mailing lists are ever exclusive to you or your dealership. Even if the vendor you use to execute your campaign tells you that you’re the only dealer they are going to use the list for, it’s still not exclusive, because the list broker your vendor bought the list from is selling it to every direct mail company it can! You never really know how shared each of these lists are. Each list could be sold hundreds of times before being retired.
Often, one of the criteria used for designing the lists is Beacon scores. This presents a huge problem if the list you’re using is not current. Credit scores are a moving target and they can change significantly in a matter of only a few weeks. Lists from resellers and brokers can be as much as six months old. Therefore, that customer who had a 525 Beacon score when the list was pulled could easily have a beacon of 450 once you get the list and execute your campaign. So, if you’re wondering why so many of your respondents don’t fit into your credit criteria when they walk into your store, it’s probably because the list used for your campaign was aged.
How can you assure that the list used for your campaign is as up-to-date as possible? You have to always consider your source. The best place to purchase lists is directly from one of the three credit bureaus: Equifax, TransUnion or Experian. These sources will have current and correct addresses, phone numbers and most importantly, current credit scores. You should also avoid any direct mail company that depends on list brokers for their mailing lists. This eliminates quite a few direct mail companies because only companies with a banking license are authorized to pull lists from the credit bureaus. You have to be incredibly selective, but this will pay-off immediately in the performance of your direct mail campaigns.
As you see, it’s paramount that your campaign utilizes a list that is as up-to-date as possible. Otherwise, you run the risk of your mail piece never reaching the intended recipient, or that the people who do receive your message might not meet your credit criteria. Using current lists generated exclusively from one of the three credit bureaus is the only way to mitigate these risks. As I have shown you, the benefit is that you know that not only is the list up-to-date but also first generation. So, the next time you are considering doing a direct mail campaign, before anything else, ask your vendor where the list is from. Set yourself up for success from the beginning of any campaign you execute and you will save yourself a lot of frustration and money down the road.
Vol 4, Issue 5
Brian Reed will depart F&I Express, the company he co-founded in 2008, four months following its acquisition by Cox Automotive.