In this special two-part series, Steve Southin, director and co-founder of automotive software firm DealerHacker and a former dealership general sales manager, talks about upgrade sales events and how do-it-yourself software now allows dealers to perform the process in-house, giving them more control and enabling greater cost savings
Upgrade sales or private sales events have been a staple marketing practice in auto retailing for as long as dealers have been selling cars. Much like the industry itself, this type of marketing has evolved tremendously as digital and database capabilities have and continue to increase.
We have come a long way from the days when we used to get on the phone and contact our entire list of previous car buyers (often printed out using a dot-matrix printer) to inform them about a special loyalty offer, a lease upgrade, or any of the creative themes we could muster up for any given month.
In this article, we’ll take a look at upgrade sales, what makes them tick, why dealers are getting good results using this marketing angle and also a new opportunity that now allows dealers to conduct the process in-house.
HIGHLY EFFECTIVE
An upgrade sales event has proven to be an effective database marketing approach for the auto industry. A database, combined with email and direct mail marketing is often at the top of the digital food-chain for return on investment and results in closing more car deals.
There’s been a lot of focus on social media this past decade and many believe this will become the next big marketing force for automotive dealerships. The easiest way to understand how database and email marketing will likely always hold the number one position is by taking a closer look at Facebook.
If Facebook is superior to email then why does it send out more emails per hour than any other company in the world (you can see this by taking a look at your own in-box)? Furthermore, if Facebook can replace the need to focus on your database of previous customers why is it now trying hard to get its hands on your database? If direct mail is dead then why does Google still send us those cards to get us to use AdWords?
Both Facebook and Google understand that they need to use these tools as important aspects of their own marketing formula. Database marketing allows dealers to engage with their own previous customers on a highly personal level.
WHAT IS AN UPGRADE SALES EVENT?
Packaged with names like private sale, launch party, vehicle exchange program or VIP sales event, these programs all have the same objective of encouraging your previous buyers to upgrade to a new or later model vehicle. They work by packaging your incentives and offers around a themed event designed to reward loyal customers during a defined time period to create a sense of urgency and more importantly, exclusivity through the personalized aspect of the offer.
PROVEN “MUST HAVE” PARTS AND PROCESS OF AN UPGRADE SALE
Data. Because an upgrade sale is database marketing, the quality of your data from previous buyers plays a primary role, not only in terms of your end sales results but also as a key component in your ability to provide effective personalization of the content that promotes your offer.
Ongoing maintenance of the data is critical. Your database requires the data to be cleaned, purged, sorted, and most importantly it must subscribe to consumer protection regulations and anti-spam laws. Focusing your attention and investment on working to build a clean database of customers who actually want to hear from your dealership should be your store’s main priority to drive your future growth and profits in every department.
It is important to segment the people on your dealerships’ database — you want to ensure that you are sending the right content to exactly the right audience of customers — those who are most likely to be interested in your offers.
Direct Mail. Results surrounding printed direct mail have actually been increasing during the transition towards digital marketing. This is likely happening since most of what lands in your mailbox today is more intimate and focused towards your relationships and what was once seen as clutter has now turned digital.
A personalized letter in the mail gains our attention today since it has become a less common marketing approach and printed invitations tend to have a much longer shelf life than email. When launching an upgrade sales event, it should be kicked off by first using a letter as an invitation. This should incorporate variable printing techniques to not only personalize content but to also ensure that you target customers’ current vehicle information to build a case for replenishing used car inventory and boosting demand as well as your desire to acquire specific details on each vehicle — such as model year, trim level and options.
Next time we will look at other proven parts for a successful upgrade sale process such as personalized landing pages, loyalty vouchers and other considerations such as compliance with the law and third party providers.
