Direct Mail vs. Email: You Get What You Pay For

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Direct mail vs. email? In a constantly evolving marketing environment, which one really delivers the best bang for your buck? On one hand, dealers tend to feel that “nobody reads mail… they just throw it in the trash.” On the other hand, dealers just can’t get past “how cheap email is… it’s practically free.”  The evidence suggests we need to reevaluate the way we use email. Rather than thinking of it as a cheap form of marketing, how we can utilize its strengths? If we continue to bombard customers, we may risk alienating them. Really, the questions you should be asking are, “How do my customers want to be contacted?” and “How often?”

  • Today, 70 percent of consumers reportedly feel like they receive too many emails.
  • The average lifespan of an email is now just 2 seconds and brand recall directly after seeing a digital ad is just 44 percent, compared to direct mail which has a brand recall of 75.

Credit: Pro Active Marketing

As the effectiveness of email marketing declines, the response to direct mail is on the rise, and printed media becomes a more trusted form of consumer communication.

Credit: Pro Active Marketing

You might be thinking that direct mail doesn’t work with millennials. The truth is, according to the United States Postal Service, 47 percent of millennials actually check their mailbox each day. Not only do young people read their direct mail offers, they actually respond well to direct mail offers. The Data and Marketing Association marks 18–21 years olds’ response rate as 12.4 percent.

Credit: Pro Active Marketing

How often should I mail? It depends.

In all other forms of advertising – newspaper, magazine, television, radio and online – there isn’t a second thought given to spending thousands and even millions of dollars marketing to the same subscribers, viewers, and listeners day after day, and even year after year. Yet, dealers question sending a direct mail campaign twice to the same list. Advertising is primarily about repetition, and direct mail is no exception.

We’re not saying to quit email and put all of your money into mail, but since you’re selling the second biggest ticket item most people will ever purchase, take the time to send a letter, postcard, or custom-printed piece to ask for their business. It just means more.

It’s Not a New OR Used Vehicle, It’s a Vehicle!

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Thanks to the internet, vehicle quality, off-lease vehicles, ride sharing and more, the used car “selling” process has been turned on its head. People used to have the mindset that used vehicles were a cheap alternative to new vehicles. “I want a new vehicle but I can’t afford one” or “I’ll just get a cheap car to get back and forth to work” used to be the mantras. Now, U.S. motorists are holding onto their cars for longer than ever. According to IHS Automotive, the average new-car ownership period stands at 6.5 years, which is up from 4.3 years in 2006. Likewise, used-vehicle owners are keeping their rides for an average of 5.3 years, which is around two years longer than in 2016, pushing up the trade-in value.

Because of this, people are reconsidering buying a new car when they can trade for a less expensive used car with great reliability. Recent research from IHS indicates that only 1 in 3 car buyers know the exact vehicle they want to purchase when they start shopping. Now, many buyers are open to both new and used vehicles.

  • 40% of new car buyers considered used and new
  • 55% of used car buyers considered used and new
  • 92% of people that bought a vehicle consider buying again
  • 70% of people that leased a vehicle considered leasing again

You need to approach the customer as a “sale.” Not a new or used vehicle, but any vehicle. Vehicle owners have drifted from “I want a new vehicle” to “I need a new vehicle.” Two in three state they need, rather than want, a different vehicle. This is a reflection of the older used car market with buyers holding onto their cars longer.

Because of the length of time in the market, don’t think of it as a one-and-done marketing proposition, but rather an ongoing, sustained communication. People still spend 108 days (3.5 months) in the market prior to the purchase of a new or used vehicle. Even though shoppers are spending a total of four fewer days in the market for a car than last year, this is still a long time. Customers in equity positions need constant contact. Half of all car buyers do not contact the dealership prior to their first visit. Dealers need to direct market toward customers who provide the highest chance for hand-raising.

Fifty-three percent of car buyers look for monthly payment information while researching a vehicle, and 47 percent of buyers said that the total price of the vehicle is more important than the monthly payment. That said, more than one-third of buyers feel the total and monthly price are equally important, highlighting the need for dealers to provide both options in their merchandising.

Prospect Vision recommends equity marketing with a “go shopping price (GSP).” The GSP allows customers to buy new or used vehicles on their terms, increasing the chance of a sale. Don’t assume that equity customers are excited to jump into another new vehicle. They may want to upgrade to a larger used SUV or pick-up for at or near the same price or payment.

It’s hard enough selling a vehicle of any kind in today’s competitive environment. Take the path of least resistance, create a happy customer and improve your gross along the way by giving the customer a choice of a new or used vehicle.