“We’re thinking of starting up a new marketing program for our business, but our database isn’t really as current as it should be. Should we spend the time to clean it up now before we spend any money on promotions?”
Jim Kahrs
There’s no doubt we’re operating in a new era in communications. However, one aspect of the business that hasn’t changed is the need to promote your business properly if you want to expand. I’ve heard people say that during the ‘80s many dealers succeeded because they “were in the boat when the tide came in.” While there may be some shadow of truth to this statement there was one key concept that was used by successful dealers back then that is still proving fruitful for successful dealers today. That concept is promoting their dealership on a broad scale.
In the Hubbard Management System, developed by author and administrator L. Ron Hubbard, there is a policy letter titled “Gross Income Senior Datum.” I think we all know what gross income is; it’s the money that comes in to the dealership from all sources. The term senior datum refers to the fact that this piece of data is more important than almost anything else that pertains to gross income. So what could be so important? In this policy letter Hubbard states that the gross income of an organization is determined by the size not the quality of your mailing list and the number of letters and mailings to that list. For a frame of reference, this policy was written in 1968. In today’s business world the term mailing list has been replaced by database and letters and mailings have been expanded to include e-mail, fax and the like.
However, the basic concept of this policy is as true today as it was then. To truly increase the gross income of your dealership you must first accumulate a large list of prospects to contact. In keeping with the first part of this policy it is important to understand that the size of your database, that is the number of prospects you’ve identified, is critical. It is much better to have a decent database with 10,000 names than a really awesome database with 1,000 names. Too often dealers get hung up on the quality of the names they add to the database and thus don’t promote their dealership to enough prospects. This does not mean that you should add garbage names to your database. There are plenty of companies that sell prospect lists. These companies allow you to choose prospects by industry codes like SIC or Yellow Pages heading, number of employees and annual revenue. In addition, you can choose prospects geographically based on state, county, zip code, telephone area code, and more. So with all of these options it is easy for a dealership to have a large prospect database and have it filled with good quality names.
The second part of this policy goes on to say that gross income is determined by the number of letters and mailings to the database. Unfortunately I have seen too many dealerships that have a large database but do not send anything out to it consistently. The “number of letters and mailings” to the database is almost non-existent. Yet they’ll tell me with great excitement about the 20,000 names they’ve accumulated. During a workshop I ask dealers how many companies they think their sales reps contact in a month and multiple calls or visits to the same company only count as one. The most common answers range from 100 to 500. Based on dealers I’ve visited I would agree with their estimates. So if your sales reps can only contact a few hundred companies a month you need to have a plan for really getting your name out to your market. You can’t think small and still have a rapidly growing business.
In order to really grow your dealership you need to take this same viewpoint when dealing with your prospect database. There needs to be regular communication with everyone in that database. Ideally each prospect would get something from your dealership at least every other month. In the 25 years I’ve been in this business I’ve heard many people say that when doing mailings and promotion (including emails) you should never send out more than your telemarketing or sales team can follow up.
I can tell you from first hand experience that this is totally false. Though it is important to follow up promo pieces that are sent out and doing so increases your sales it is a big mistake to limit your reach to only those you can follow up. To truly be successful you must reach far more than the 100-500 companies your sales reps touch on an average month.
Now that we’ve covered the basic process and reasons for promoting your dealership let’s look at the ways to accomplish this in the 21st century. Common methods for reaching large numbers of prospects include direct mail, e-mail, fax (there are limitations on faxing that will be covered later), internet banner ads, print ads, TV, radio, billboards and more. We’ll cover the first three here.
Direct mail is probably the most widely used method of communication with prospects. While working with clients in the office systems industry we have had great success with postcards. In order for your message to get through it has to be read. When sending promotional mail in an envelope your first challenge is to simply get the prospect to open the envelope and read the message. A well-done postcard uses an attention grabbing message on the front that pulls in the prospect’s attention. It then directs them to read the full message on the back which leads them to call you. The other major benefit to postcard mailing is the cost. It usually costs much less to produce a very good quality postcard then a decent quality envelope mailer. Postage rates are also lower for postcards allowing you to hit more prospects. This keeps in line with the principles in “Gross Income Senior Datum” that you must have a large database and send promotion out to it often.
E-mail is probably the most effective promotion method I’ve seen used at dealerships in terms of response rates. Unlike the standard post office mail, email is usually not screened by anyone in the office. The receptionist or secretary doesn’t open the decision makers e-mail messages but in many cases does open and throw away postal mail promotion. There are two factors that contribute to success with e-mail. First you need to accumulate a list of e-mail addresses. I’ve done many informal surveys of business cards collected by dealer sales reps and determined that approximately 90 percent of the cards collected have e-mail addresses on them. If you’re collecting cards you need to get these addresses into your database. The second challenge is getting your message through the SPAM filters that most e-mail systems now use. Methods for doing this vary based on the system used for creating and sending email messages. Regardless of the possible pitfalls of e-mail promotion I strongly recommend this method because of its successful track record with the dealers we’ve worked with.
Finally there is fax promotion. First a word of caution, the FCC has enacted a law prohibiting companies from sending unsolicited promotional faxes. If you’re going to send faxes to prospects you must have their permission first. In order to be covered you should get approval in writing before sending promotional faxes to prospects. If you send unsolicited faxes the recipient has the right to sue you in civil court for $500 per fax received. However, you can fax to any customer who has purchased something from you within the last 18 months. Fax promotion can be very successful. If you follow the guidelines of the law you can turn this into a very strong part of your promotion campaign.
With all of this said, the moral of the story is communicate to as many prospects as possible as often as possible. If you limit your reach via promotion you are also limiting your potential gross income. And I haven’t met a dealer yet who wants to limit their gross income. So take that list of prospects – regardless of its “quality” and start communicating with them regularly.
About the Author: Jim Kahrs is the President of Prosperity Plus Management Consulting, a consulting and training company working exclusively with office systems dealers. Jim can be reached at jkahrs@prosperityplus.com or (631) 382-7762.
