“Team Velocity has been a core component in our marketing strategy over the past 42 months and has been a huge part of our success in becoming the #1 Hyundai store in America.”
-David Frazier, Hyundai of New Port Richey
The value of traditional marketing has decreased dramatically due to the majority of consumers migrating online and audiences being divided amongst hundreds of television and radio stations. As a result, dealers are using more targeted and cost effective means of marketing that they can measure. Targeted direct mail has re-emerged as an effective strategy for local advertisers, like dealers, whose sales come from a targeted section of a market rather than the entire market.
Dealers are asking themselves, “Why would I spend money to reach every part of my market when 90% of my sales come from a limited geographical area?” Dealers are recognizing that, although their business is larger than most local retailers, their business is very local. Sure there are customers that drive an hour or more to save a few hundred dollars but the lifetime value of these customers is much lower than a local customer due to the lack of service and repeat business. A local customer will buy many cars over a lifetime at a higher average gross and will have a much higher probability of servicing with the dealer, which is a dealership’s lifeline in tough times.
“I looked at our Ad Tracking reports and less than 15% of my calls came from television, radio and print. The majority of my inbound calls came from the Internet and targeted direct mail. After realizing this, I spent more on mail and less on traditional media and my market share increased substantially. In fact, for several years I have sold about the same or less new Honda as my two (2) nearest competitors. After changing my strategy in June of 2009, we sold 473 more Honda’s than either of them in the last 6 months” said Brian Benstock from Paragon Honda.
Team Velocity’s targeted marketing system promotes all the dealerships profit centers: New, Used, Finance, Service, Parts and other departments they may have. Their market research technology is the secret behind their success according to their clients. “We send 70 percent less mail today but generate close to twice the business… because we target “in-market” consumers who need to either buy a new car or service their old car,” said Benstock. The company’s list filtering technology creates a profile of the “perfect prospect” – the consumers who have the highest probability of doing business with the dealership based on their 5 years sales and service history. The system sends custom messages to customers and conquest targets when they are ready to buy or service their vehicle. “Most campaigns promote more than one profit center so our dealers can get a better return per mailer,” said Team Velocity’s Bud Blackburn. “A consumer that has 30,000 miles and 6 months until their warranty expires will receive one custom mailer with offers for sales, service and an extended service agreement. By targeting the right customer with the right message we increase the response rates, sales and service volume, average revenue per transaction, loyalty and frequency,” added Blackburn.
