Homebuyers Moving to Suburbs Means Mail Opportunity

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For years, we saw the decline of suburban neighborhoods as millennials, in particular, gravitated toward urban cores. Now, due in part to the coronavirus pandemic, we’re seeing more buyers moving to suburban areas. A growing subset of the population is looking to escape densely-populated city areas.

In this post, we will examine how this shift represents an opportunity for dealers, as well as how you can use direct mail to capitalize.

 

Data Reveals a Shift in Urban vs. Suburban vs. Rural Preference

According to a recent Redfin report, pending sales increased 6.3 percent in rural areas, 9.1 percent in suburban areas, and 5.6 percent in urban areas year-over-year during the four-week period ending Aug. 2. Actual sales declined at twice the rate for urban areas versus suburban areas during the same time period.

Dealers can consider targeting suburban zip codes that are growing. For some residents, moving from the city to the suburbs represents a new need for car ownership. For others, longer commutes represent an increased need for regular maintenance and repairs. Direct Mail from Prospect Vision can combine service and sales to help customers in both of these areas at the same time.

 

The Pros of Postage

You’re looking for results, and direct mail gets them. In fact, according to the ANA / DMA Response Rate Report 2018, direct mail achieves a higher response rate than any direct digital marketing medium – including email, paid search, online display, and social media. The “whys” of that statistic are varied, but they all make sense when you think about today’s marketing environment.

 

Electronic Overload

Consumers are constantly inundated with digital media messages. From overflowing inboxes and an endless feed of TV and radio to targeted social media ads, your customers are exposed to a constant flow of electronic information. Once saturated with these messages, they may be less likely to read your email, absorb your commercials, or act on your dealership’s calls to action.

 

Filtered Competition

Marketing mail volume has been on a downward trend over the past several years, according to statistics by the U.S. Postal Service. What does that mean for your dealership? There’s more room for your direct mail messages and less competition for your customers’ eyes at the mailbox. Getting access to a potential customer’s undivided attention even for just the few moments it will take to scan the ad is an invaluable edge.

How Many Marketing Emails Go to Spam?

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At Prospect Vision, we’re known for our direct mail capabilities. But we also offer email marketing campaigns as part of a dealer’s traffic-driving arsenal. One question that affects email differently than mail is that of deliverability. In other words, what percentage of messages actually end up in front of customers?

When you send a direct mail campaign, the post office provides a list of undeliverable addresses at the end of the campaign, mostly from people who have moved or if an address is written incorrectly. There’s no gatekeeper that prevents the carrier from placing your mailpiece inside of a customer’s mailbox – apart from the occasional angry dog. 

With email, it’s a different story. Email providers like Gmail and Yahoo have sophisticated software that is designed to keep out unsolicited messages. In fact, Return Path’s 2017 Deliverability Benchmark Report says that 20 percent of all marketing emails end up on the spam box. 

But before you shun email marketing altogether, it’s important to know that not all vendors are made the same. Prospect Vision’s average spam rate is a fraction of the industry average. How do we manage? It’s all about using the right techniques.

 

Tips for Avoiding the Spam Filter:

Here are a few best practices to keep in mind when designing an email marketing campaign.

  • Include a Physical Address. Not only is having a physical address somewhere in your email good for avoiding spam filters, but it’s also the law. The FTC requires all email marketing to include a valid physical postal address. Your dealership’s address will work just fine here.
  • Add an Unsubscribe Link. As much as we don’t want customers unsubscribing, it’s important to allow them to do so. Having an opt-out link is another FTC requirement, but it’s also good PR. There’s nothing more frustrating than being on a marketing list with no way to unsubscribe, and causing that frustration will reflect negatively on your brand.
  • Avoid Spam Trigger Words. It’s not hard to know what counts as a spam word. Anything gimmicky or with too much of a sales push can trigger spam filters. Here is a resource to consult when crafting emails without spam words.
  • Use an Awesome Subject Line. If you make it into the inbox, you still have to get through a customer’s mental spam filter. Keep your subject short, to the point, and offer value. Try this tool for seeing how your subject line stacks up.

 

Ready to delve into the world of email marketing? Contact us today for a free, customized marketing plan for your dealership.

Direct Mail’s Impact During the 2020 Pandemic

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Practically everything has been reevaluated during 2020, from the way we work to the way we buy cars. Marketing strategies are amongst the line items being examined in a new light. Specifically, now is an ideal time to look at the effectiveness of digital advertising versus more traditional methods like direct mail. Is one more effective than the other? And has the pandemic changed how Americans respond to promotional messaging?

 

Direct Mail’s Pre-Pandemic Advantages

Even before COVID-19 struck, direct mail enjoyed some unique advantages over more technological flavors of marketing. For example, direct mail is in a position to stand out due to the sheer quantity of it – or lack thereof. On average, 269 billion emails are sent each day versus USPS’s daily delivery of 472.1 million mail pieces.

With consumer sentiment, direct mail is the winner, too. Research published in 2017 found that 87 percent of consumers consider mail communications to be “believable,” while just 48 percent said the same about email.

 

How Direct Mail Stands Out When Everything Changes

Already, email outnumbers direct mail. With more Americans working from home, digital communications have only increased. This has led to digital marketing becoming less effective in some ways, as consumers grow numb to the electronic onslaught. Mail, on the other hand, stands out as a welcome break from endless screentime.

Better yet, the CDC and WHO were quick to announce that mail and packages pose little-to-no threat regarding COVID-19 transmission. With Americans still staying home more than usual, they are closer to the mailbox and more likely to keep an eye out for new mail as online ordering surges.

For companies choosing to use direct mail to reach customers in 2020, there are a few best practices to keep in mind:

  1. Make sure your messaging aligns with the uniqueness of 2020. What new needs might your customers have? How can your product address these? Be careful not to take advantage of the pandemic; rather, offer solutions that make your customers’ lives easier during a difficult year.
  2. Adhere to social distancing in imagery and messaging. Avoid photos with close contact, touching, and events. Even if they were taken pre-pandemic, they will come across as tone-deaf today.
  3. Show empathy toward customers. Including a simple line reminding customers that you are there for them and understand the challenges we’re all facing can have a profound effect on the image of your brand.

In conclusion, direct mail has seen its effectiveness increase even in the presence of digital alternatives. The events of 2020 only underscore the unique benefits physical mail still holds for dealers and marketers.

All Signs Point to Mail

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We think it’s safe to say that none of us has seen a sales environment like this. But one thing is for sure, those in the market for a new or used vehicle are still in the market. The question is, what is the best way to appeal to them?

Obviously, we are dealing with a smaller overall new-vehicle market. TrueCar’s latest forecast predicts “total SAAR to decrease 16% from a year ago from 16.7 million units to 14 million units. — Used vehicle sales for July 2020 are expected to reach 3,759,781, up 9% from a year ago and down 1% from June 2020. … This is up 31 percent versus July 2019.”

Current buyers in the market or those sitting on the fence need a good reason to make a move. Initially enhanced factory incentives and a glut of new vehicle inventory as reported by the press were enough of a reason to spur new vehicle sales. However, at the same time, used-vehicle prices dropped as uncertainty for rental car inventories and anticipated slow new vehicle sales caused processes to plunge.

Now, it’s August and new vehicle dealerships are running out of inventory, and production isn’t quite up to speed. Used vehicle prices have rebounded, and dealers need used cars to bridge the inventory gap.

Mail presents your greatest opportunity for the current situation. Service Mail drives dependable traffic to your service lane. Equity Mail attracts owners in equity purchase or lease maturity positions. Sales mail attracts customers who may need to downsize or upsize in the current environment. All these strategies allow for personalization of the message, giving prospects a reason to buy or trade now.

 

Why Not Email?

Each year, the Ponemon Institute releases “The Most Trusted Companies Study,” a list of overall top-performing companies and federal agencies that are perceived to be most trusted. What these organizations have in common is a strong orientation to respecting their customers and providing the best possible customer service.

The research is an objective study that asks consumers to name and rate organizations they believe are most committed to protecting their privacy. Participants are asked to apply the following definitions when determining the companies they trust:

  • Personal information – Consider only data about yourself and your family. This information typically includes name, address, telephone numbers, email address, Social Security number, other personal identification number, access codes, age, gender, income and tax information, shopping information, account activity, and many other pieces of data collected about you.
  • Privacy trust – Your belief that the company or federal agency is honoring its privacy commitments to you, and keeping your personal information safe and secure. This includes its commitment not to share your personal information unless there is a just cause or you have given your consent.

More than 100,000 adult-aged consumers were asked to name up to five companies they believe to be most trusted for protecting the privacy of their personal information. Every year that’s been surveyed, the United States Postal Service has made the list. The truth is that people trust regular mail more than digital mail communications. Especially when it comes to information such as their vehicle financial status, payoff, and lease terms.

Every dollar counts. You need to squeeze every ounce of profit you can from every department. At this point in time in our industry, mail represents your greatest opportunity. More trust, more value, more traffic.

Top Ten Reasons To Use Mail To Advertise Used Cars

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Direct Mail still provides one of the highest ROIs in marketing when it comes to reaching customers. Check out this list of the top 10 reasons to use mail specifically for used cars.

1. Dealers have a historically low inventory of used vehicles.

2. The media is now reporting that there is a used vehicle shortage, making mail or advertising more credible when asking to buy their vehicle.

3. Dealers need to be super sharp digitally and in their communications with customers during this shortage. Finding out what their current car is worth (63%), and locating a dealer or getting dealer info (46%) are the top consumer shopping destinations (AutoTrader).

4. Even if every dealer in a market is advertising “we need your car,” your dealership should still advertise it. Customers will always shop more than one offer and you want your dealership to be included.

5. It takes 6 to 8 weeks to receive a new vehicle once ordered from the factory. Current dealership inventory is probably less desirable than inventory your dealership had 4 to 6 weeks ago. Traffic sells cold product.

6. Dealers need the inventory.

7. A “trade-in” is almost always better than a vehicle obtained at auctions. Trade-ins are unique and therefore represent a greater profit opportunity.

8. Used vehicle auction prices are on the increase. On a year-over-year basis, most major market segments saw seasonally adjusted price increases in the first 15 days of July. Luxury cars and pickup trucks outperformed the overall market, while most other major segments underperformed the overall market.

9. The easiest customer to convert is an existing customer. Dealers at a minimum should be mailing and emailing their owners.

10. The CARES ACT. If the CARES ACT is extended, you’ll have consumers possibly looking for a used vehicle based on enhanced unemployment income. If the CARES ACT is not extended, you may have consumers looking for cash or lowering existing payments.

The Legality of Direct Mail Marketing

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The FTC and many state-level regulators have made auto finance and dealership advertising practices their priority enforcement areas. The FTC says the rules are straightforward, but some are not very clear.

“In the past six years, the FTC filed about 40 enforcement actions related to auto dealerships,” said Nikhil Singhvi, a staff attorney in the FTC’s Division of Financial Practices, in an article with Automotive News. Singhvi said enforcement areas include deceptive advertising, deceptive and unfair finance practices, title loan fraud, debt collection, privacy and data breaches, and credit reporting violations.

The FTC also increasingly seeks to hold individuals accountable and is including them in its enforcement actions when it can show that they knew of deceptive practices, Singhvi said.

The FTC receives dealership complaints through consumers, other law enforcement or state partners, consumer advocacy groups and even former employees, he said. The FTC in its 2018 report tallied more than 100,000 auto-related complaints.

Singhvi said the FTC’s rules are easy to follow for dealerships. “The baseline that we enforce at the FTC is don’t deceive consumers. That’s a pretty easy one,” he said. “That covers things like advertising for incentives that are not actually available or that have such onerous limitations that they’re effectively not available to anyone.”

The FTC also scrutinizes bait-and-switch advertising for vehicle offers that don’t exist but are used to draw people into the dealership.

“The specific rules for financing advertising have not changed dramatically in a long time, the specific financing terms that must be disclosed,” Singhvi said. “These aren’t very complicated matters, and they are things that compliant dealerships should be able to handle.” The FTC also monitors social media advertising, where it can be difficult in limited space for a dealership to make the required disclosures, Singhvi said. (Automotive News)

NADA has provided guidance for advertising. In 2015, the association created a guide for dealers, manufacturers, finance companies, and dealership ad agencies on ad compliance that covers 41 topics and provides examples of good vs. bad ads. Those guidelines can be found here.

Dealership ads need to disclose triggering terms required by the Truth in Lending Act and the Consumer Leasing Act, said Randy Henrick of Mosaic Compliance Services. Leasing also requires many additional disclosures such as the number of payments and security deposit, and some states require excess mileage or allowed mileage disclosures or the cost to buy at the end of the lease term.

“What gets dealers in trouble is advertising the payment amount, or advertising a low APR for a certain number of months and not saying anything else,” he said. “Or putting it in mass type in color that bleeds into the background that’s not clear and conspicuous.”

Other problem areas are teaser terms, undisclosed balloon payments, false $0 upfront leases, undisclosed lease terms, hidden rates, fake prize promotions and credit and leasing violations. (Automotive News)

In addition to the FTC, dealerships need to know their state regulations covering deceptive and unfair advertising. That’s where Prospect Vision comes in. Prospect Vision’s integrated software ensures accurate pricing and includes all disclaimers. Your mail pieces are then archived for future audits. The team at Prospect Vision is specialized in communication compliance.

Beyond A House: The Biggest Purchase We Make

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You’re considering one of the biggest purchases of your life and you get – wait for it – an email.

But it’s just like the hundreds of emails you get for everything from drug stores to dental appointment reminders.

If you’re asking someone to make the second biggest purchase of their life (behind housing), shouldn’t you at least take the time to make it personal?

 

Letters and handwritten cards have greater importance now more than ever. These days, our email boxes can feel flooded with junk mail every day, and missives from companies are sometimes automatically filtered out, if not thrown in the junk mail folder immediately. On the other hand, hard-copy letters are fewer and further between now, and each one gets a little more attention than before.

Everyone gets mail. It’s not just seniors, either, as more and more young people are opting out of the web and focusing on life away from screens, phones, and computers. Using traditional mail is still the best way to contact everyone. Forty-four percent of millennials pick up mail at least six days a week, compared to 60 percent of Gen Xers and 73 percent of Baby Boomers.

Finally, according to the USPS Office of Inspector General, the decline in mail volume may be more nuanced than some realize.

“Take the drop in First-Class Mail (FCM), for instance. FCM decline varies widely by location… For example, in Dallas, the percent of First Class Mail (FCM) volume lost was greater than in Charleston, WV – where it was close to zero. Moreover, the rate of decline is slowing or has even stopped in many of the areas that have lost the most mail volume. Declines in U.S. Postal Service mail volume vary widely across the United States.”

Mail providers and the U.S. Post Office ensure that your letter gets to the mailbox of the person written on the envelope. On the other hand, digital documents can easily bounce back for a number of reasons, from misspelled addresses to full inboxes or out-of-office situations to spam folders.

When you come right down to it, paper mail just means more. The key is feelings. Seventy-five percent of the inspector general’s survey respondents said receiving personal mail “made them feel special.”

Doesn’t it make sense that if you’re asking a person to make the first or second biggest purchase decision of their lives, you should at least take the time to put it in writing?

Timing is Everything When Getting Customers to Upgrade a Vehicle

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In July of 2018, CARMAX published a loyalty report from customers who traded in cars. Using their data, CARMAX explored which cars people own at trade-in and what they purchase as their next car. Did they stay with the same brand or not? Are people loyal to the same type of car they used to drive (i.e., do SUV owners keep buying SUVs or do they switch to sedans)? This was a great test case because, given choices of dozens of brands in close proximity, what percentage would stay with the brand they were driving. New car retention hovers around 52 percent, but given freedom of choice, what would consumers pick?

The highest ranked vehicles traded in for the same vehicle was only 30 percent. That means three out of 10 repurchased the same brand, at best. The average was closer to 20 percent. In this new era of digital-based competition and customer control, people are increasingly buying because of a brand’s relevance to their needs in the moment.

The truth of the matter is that loyalty is waning. And you don’t want to take the chance of your customer picking something else. Acquiring a new customer can cost five times more than retaining an existing customer. Increasing customer retention by 5 percent can increase profits 25–95 percent. The success rate of selling to a customer you already have is 60–70 percent, while the success rate of selling to a new customer is 5–20 percent.

Timing is Everything

A new vehicle purchase is still an impulse buy. A friend of mine in the car business always used to say, “Rarely does anybody really have to have a new vehicle. Somewhere in their brains, they have justified a new vehicle.” The service lane is the optimum location for capitalizing on relevance and timing. The customer is thinking about their vehicle, they may be questioning if it is time for a new vehicle, or a new model may have caught their eye on the way to the service lane. This is the perfect time to insert yourself into a conversation.

Having a dedicated person or team is a great way to help ensure that you’re in the conversation. This way, their main focus is on transitioning service customers to new or used vehicle sales. Having a person that becomes used to dealing with these transitioning prospects is an important asset. Having someone that has learned the nuances of nudging a prospect along increases the chance of the sale.

Relevance

You have to find the right customer who is in the perfect equity position to upgrade to a new vehicle. Once the service appointment is set, look at the customer’s history and their equity and see if the time is right to draw them toward a new car. Providing them with a loaner while their car is getting serviced is a great way to help transition them from the service drive into sales. Prepare some offers for the customer, and once the car is returned and they say they love it, provide them with the offers to purchase the vehicle with no money out of pocket. Thanks to your data, you already knew the customer’s situation before they arrived and were able to draft offers that fit their particular situation.

Don’t Fall Prey to the Status Quo

To succeed in the non-loyalty era, dealers must be continuously willing to abandon old practices. As new technologies shift customer journeys and expectations, they can (and should) also enhance companies’ abilities to engage with customers in more relevant ways. Often, the greatest roadblock is a dealer’s lack of willingness to transform their processes, organizations, and mindset into something new.

Mastering Service Lane Marketing

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“Customers don’t know what they want until you show it to them.” – Steve Jobs

When customers shop, they either browse vehicles that might catch their fancy, or they gravitate toward a vehicle that fits their needs in the best possible way. How you approach these people and the environment you place them in is critical to your success.

If your customers don’t really need a new vehicle but are in an equity position, then you need to give them a promotional experience – an excuse to buy. But, if they need a new vehicle due to costly repairs or obsolescence, then you give them information – logic.

One size does not fit all

You’re more likely to convince customers to buy or trade for a vehicle if your strategy aligns with their mindset. You need to have your service lane ready for both promotional and logical purchase mindsets.

Q: What makes car shoppers consider a vehicle they don’t really need?

A: Positives

Unengaged customers are more likely to consider buying a new product if they anticipate a “win,” or if that product promises a feeling or an experience that is new or exciting. An example would be building off-road displays for crossovers, SUVs and pickup trucks Or, an example of increased cargo capacity (bikes, kayaks, golf clubs, luggage, etc.) can be effective in giving the customer a visual for a new experience.

Unengaged customers are put off by taxing, factual details. One possible reason is that when shoppers imagine the feeling or experience a product promises, they’re using the brain’s daydreaming mode. You can only daydream if your mind is allowed to wander, and it can’t wander if your attention is absorbed in numbers.

Look at your service lane. Is it just nuts and bolts? (Pun intended) Is the service lane included in the dealerships sales activities? In addition to providing service information, does it communicate that NOW is a good time to trade up?

Q: How do you convert a “need” buyer?

A: Information

If you have a need buyer and it would be advantageous for them to switch to another vehicle, then you need to give them information. Give clear, detailed specifications and offer accurate comparisons to maintaining their current vehicle vs. buying or leasing a new one. Here is a checklist for the information buyer:

Fuel economy – Gas prices may be low now, but chances are they’ll rise again. The fuel economy of new U.S. cars and trucks hit a record 24.7 miles per gallon.

Repair costs – How much it costs to repair your current car. If your annual repair bills exceed a year’s worth of car payments, then it’s time to start shopping.

How much value your car continues to lose – Cars depreciate significantly over the first few years of ownership, often more rapidly than your monthly payments are paying down the loan, putting you upside-down financially.

Safety – Every car should have:

  • Backup camera
  • Curtain airbags
  • Electronic stability control (ESC)
  • Forward-collision warning
  • Blind-spot monitoring
  • Lane-departure warning
  • A “Good” score in the IIHS small-overlap test

Only the latest designs do well in the difficult small-overlap front crash test from the Insurance Institute for Highway Safety. Many of today’s high-tech cars work to avoid crashes altogether, warning the driver about hazards and sometimes responding to threats quickly. Advanced systems can automatically slow or completely stop a car. Visibility aids such as rear cameras and blind-spot monitoring show what’s around you, helping situational awareness.

Connected features – Almost every recent car has these as standard.

  • Hands-free phone usage
  • USB port for plugging in a phone
  • Bluetooth phone connectivity

Specialty items

  • Voice commands recognition
  • Built-in navigation
  • Ability to use integrated apps like Pandora or Spotify

At the very end, signing the contract to buy a vehicle is an emotional decision. It’s a significant commitment. But, knowing a customer’s mindset along the way can help you determine the best path to take on the way to a sale.

Reaching Women Shoppers Through Direct Mail

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According to the National Mail Order Association, women have exclusive responsibility for sorting mail and choosing which items to keep for further consideration in two-thirds of U.S. households. By many other accounts, more than 80 percent of those who pick up the mail across the country every day are women, most of whom also serve as the primary shoppers both on and offline for their households.

Women also tend to read each and every direct mail piece addressed to them.

A report from the marketing website she-conomy.com found that 65 percent of new cars are purchased by the woman of the household.  American women spend about $5 trillion annually. This represents over a quarter of U.S. Gross Domestic Product. For retailers, women shoppers are their largest target audience.

As digital advertising continues to grow, the effectiveness of direct mail cannot be overlooked. As online shopping increases each year, it is important to note that studies show that 67 percent of online action is driven by offline messages. A study by the Direct Marketing Association shows that 78 percent of consumers react to direct mail immediately when they receive mail from a brand that they’re interested in. Forty-four percent visit the brand’s website and 34 percent search online for more information about the product.

Before you drop your next mail piece be sure to keep your female recipients top-of-mind:

  • Sell customer service — Women want to know how the transaction is going to be handled. They prefer nice and easy. Make a customer care representative available by phone to strengthen the relationship and pave the way for a smooth transaction.
  • Impart useful information — Women do their research before buying and like to know why making this purchase is a good decision. In addition to expressing why it’s a great deal, include why it’s a smart deal.
  • Be personal — Use first names in the copy and make each recipient feel special with messaging that is polite, factual and smart.

Women drive 70–80 percent of all consumers purchasing through their buying power and influence. I can’t tell you how many times I’ve seen a salesperson mishandle a female customer. Remember, they not only buy for themselves but also direct purchases for their partners, children, parents, in-laws, nieces and nephews. Placing direct mail in women decision-maker hands provides you with a tremendous opportunity. Female shoppers easily constitute a vast majority of vehicle purchase decision-makers.

From cars to healthcare to vacations, women are calling the shots at home. They pick up and read mail, place orders, and use coupons at retail locations. Dealers need to acknowledge the dominance of decision-making women and personally address them directly through the mailbox.