Article

Data-Driven Sales

June 2013, Auto Dealer Today - WebXclusive

by Courtney Cole - Also by this author

Let’s pretend you have a previous customer named Tonya Jones. One day, she walks out to the mailbox to find a nice surprise: It’s a letter from you with an offer she never expected.

Dear Tonya,
We thought you might want to give yourself the gift of a brand-new 2013 Chevy Silverado for $47.88 less than your current payment. You can get this deal for a new 72-month term with zero dollars out of pocket.

Tonya, you should have 22 more payments of $445.84 on your 2010 Chevy Silverado, which you purchased from us on Nov. 10, 2010. We estimate that it should have about 47,322 miles on the odometer and that it is in excellent condition. Because your payments are current, you can actually lower your monthly payment by $47.88 by purchasing a similarly equipped 2013 Silverado.

You’ll enjoy a totally new truck, plus a new warranty, possibly improved gas mileage, lower short-term maintenance costs and advanced safety features. Due to incentives changing monthly, this offer expires at the end of June. Please contact us by phone or e-mail to schedule an appointment so we can verify the mileage and condition of your vehicle.
Sincerely,
Your Dealer

P.S. Want a different vehicle this time? Go to www.getmeanewcar.com and you can change to the Chevrolet of your choice while adjusting down payment and term. Just enter your VIN as a username and use the attached password to log in.”


I don’t know about you, but if I were Tonya and received this letter — which not only calls me by name but includes detailed and accurate information about my vehicle — that tells me I could lower my payment with zero down on a brand-new truck, you would have my attention. 

I might wonder how you know how many miles are on my odometer, but I would be excited about trading it in for a new one for less money.

As dealers, we know we make more money from previous customers than new ones. How nice would it be if, every month, we could contact our customers who are in the perfect position to trade their vehicles? We could reach them via e-mail and snail mail. How effective would that be?

The technology to complete this process already exists. You can set up a web page that will allow your customers to log in, enter their information and calculate their payment if they trade their vehicle in for a new one. They can get numbers based on any down payment, including zero, and also have a lease option. 

The numbers in the mailers and online are all based on what the dealer wants to make. If you want to put the trade-in as average Black Book and make $2,000 on the deal, that’s what the payments are based upon. You can also use a generic rate (like 4.9 percent) for most customers and a special finance rate (maybe 15.9 percent) for subprime customers. 

The return on investment, in my experience, is excellent. I have seen cases where the data costs $1,500 per month and each piece of mail costs less than a dollar. 

You get to choose the recipients and set the parameters, from equity all the way to a $150 payment increase. You might be surprised by how many people are ready to get rid of that nice car you sold them for a newer, even nicer one. 

At my operation, we have been averaging about 65 deals per month at $3,000 front and back. That’s $195,000 gross on a $6,200 investment, which equates to $188,800 net profit, or 30 times your original investment. You couldn’t do better playing the stock market. 

The technology is out there, and the right data can push a lot of customers your way. You just have to seek it out. If you would like more info, feel free to contact me.

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