Is Direct Mail Marketing Effective for Auto Dealers?

While no definitive solutions exist, recent data and direct mail marketing response rates in the automotive retail business provide some insight. According to one auto dealer marketing agency, auto merchants received a $33.81 return on investment for every dollar spent on direct marketing in 2020, which is a significant margin.

According to a DMA survey from 2021, various varieties of snail mail had the lowest overall cost per lead, which was lower than the expenses recorded for digital advertising. The lowest overall cost per lead or order was $47.61 for direct mail catalogs, followed by $47.69 for direct mail inserts and $75.32 for mailed postcards. According to the same study, when direct mail letter-sized envelopes were sent to prospect lists, they had a response rate of 1.38 percent, which was more than doubled when sent to house mailing lists.

The bottom line: while it's not a good idea to rely solely on direct marketing tactics to generate new business, direct mail marketing remains a viable and cost-effective strategy for auto dealerships and merchants. Of course, there are other factors that influence the effectiveness of a direct mail marketing campaign.

Here are some pointers for auto dealers and shops trying to maximize their direct mail marketing campaigns:

Make the proposition more enticing and compelling

Consumers are more likely to respond to offers that include a discount or are only available for a limited period, according to studies. Consumers are more inclined to act rather than procrastinate when the offer's window is narrowed to a certain time range and the deal is more enticing.

Toss in a few important mailers with your direct mail items

Key mailers, when combined with "lucky key" contests, have been shown to increase customer traffic to your dealership. After all, who can say no to the chance to win a new car? Your show floor offers and sales personnel can take care of the rest once they arrive at your venue.

Make it easier for customers to reply to the offer by simplifying the process

Direct mail pieces should make it crystal clear what consumers are expected to accomplish and how they may do it. Include easy-to-follow directions such as a website landing page URL, a toll-free phone number, or both in your calls to action.

Use newspaper inserts to your advantage

Direct mail inserts have the second-lowest cost per lead, according to studies, and they might be a terrific way to bring new buyers onto your show floor. Try including a "number match" offer on insert pieces that requires customers to come to your dealership to determine if their scratch-off numbers are a match.