Challenge
The challenge is to address a common dealer’s question: Could a dealership take their e-mail customers’ names out of their direct mail list to save money? We wanted to see the response from customers who received e-mailed promotions instead of direct mail promotions.
Approach
We decided to look at several dealerships and track whether those who opened and clicked on an e-mail promotion in one month would continue to open and click on e-mails over the next six months, suggesting a heightened level of interest due to the interaction with the marketing piece. If a large enough grouping of customers could be shown to interact with the e-mails each month, it could be suggested that a dealership could exclusively send e-mail promotions.
Results
After the end of the review, an interesting trend appeared. While an average of 6% of customers who received just an e-mail promotion clicked on it, an even smaller portion continued to click in the following months. On average, 17% of the original 6% of just e-mailed customers continued to click over the next six months. The core group of loyal “clickers” represents only 1% of all customers who receive your e-mails.
This suggests that the people who clicked in the first month are less likely to click the following month because a portion of those people used the first month’s coupons for servicing. These customers would click again a few months later—only when their vehicles again needed service. This inconsistent behavior, due to a given customer’s current need, creates a very small core of loyal monthly e-mail “clickers.”
1,000 Person Story
Using an example of 1,000 customers and the results of our experiment, we would ask the dealer the following questions:
- Of the 1,000 customers, you only have 200 e-mail addresses. What do you do with the other 800 customers?
- Of the 200 customers who have valid e-mail addresses, 184 will receive the message (the others will bounce back).
- Of those 184, 12 will unsubscribe. That will leave 172 people.
- Of the 172, 12 will click through the message.
- Of the remaining, most who click through do not do so on a monthly basis.
Conclusion
It is clear from the results that marketing only to those customers who respond with an e-mail click is dangerous to your marketing strategy. The dealership may have saved money, but it was simply because they did not mail to the majority of their database. E-mail is an excellent addition to heighten results with other marketing initiatives, to extend a dealership’s brand and to target customers who prefer e-mail promotions. We would advise curbing expectations of using only e-mail (in place of other forms of marketing) with a given customer without knowing whether or not that customer responded with a repair order. There is a lot at stake if you consider direct mail is associated with $40,000-$60,000 for every 1,000 communications sent.
A more effective strategy might begin by asking your customers to find out which ones would prefer e-mail over direct mail. Follow up a service order with a short survey on customer satisfaction, and include a question asking if they would rather be sent e-mails exclusively.
