Direct Mail vs. Internet Leads – The Real Cost

Direct Mail and the Internet!

Try our new ( Purl ) Personalized URL's to enhance your online marketing that tie's into your Automotive Direct Mail Marketing. Without a doubt, direct mail is your best bet if you’re looking for a targeted way to find new customers and sell additional units each month. But with the rise of online car shopping and “need-more” internet leads, it seems many dealers have forgotten how profitable direct mail can be. That is, except for the ones who are making money hand-over-fist doing it? Why didn’t they tell you about that? Some common misconceptions are driving this industry-wide gravitation to the internet. Those misconceptions are regarding your Cost per Lead (CPL), Cost per Sale (CPS) and how they relate to your bottom-line.

Look at Internet Leads. Many companies sell them for around $25/per lead. Buy 100 leads, and your CPL is simple. 25 bucks…all day, everyday. What could be better? Consistent pricing and lead flow with very little risk. But what are you really getting for your $2,500.00?

With most Internet Lead providers, you have no clue about the quality of the leads being delivered. FYI, these leads can come from anywhere… A large percentage are shoppers, and a bunch more just wanted a “FREE I-POD”, and have no idea why you are calling them. Figure on average you close 8% of those 100 leads you bought. That’s $312.50 CPS. Not bad. But you spend valuable time working 92 dead-end leads to sell those 8 cars. What’s that extra time working for you?

On the flip side there’s direct mail. For the sake of this article and what generally performs best, let’s use Credit Scored mailers. Companies that maintain connectively to credit bureau data to build lists and target pre-approved customers are your best choice. You know the data is clean and you can fine-tune your lists real-time with a host of credit and demographic attributes. – It’s live data.

So you spent that same $2,500.00 on direct mail. You got 2,500 pieces in the mail, averaged a 1% response, and ended up with 25 leads. “Wait… 25 leads? Are you insane? That’s four times the amount I spent on my Internet Leads. You’re right. It is expensive. And here’s the kicker…You may not get 25 leads. You might get more than that. Could get less. Analytics and experience allow us to predict your return with a high degree of accuracy, but regardless of what anyone tells you, there’s still no sure thing in direct response.

But let’s talk about the leads you did get. These are qualified customers. They know what they applied for, and are expecting to buy cars. On average dealers close a much higher percentage of these leads – over 30%. Now of these 25 leads you sold 8 cars. Your CPS is the same, $312.50 – the only number that matters here. Plus, you only had managed 25 leads to do it. Bottom-line, you sold an equal number of cars at the same CPS – with a quarter of the effort.

That’s why the most successful dealerships rely on direct mail to maintain their huge sales volumes. With Internet alone, the leads would make it next-to-impossible to reach these numbers. And in most cases, there are simply not enough leads available in a given market to fulfill the demand. Try our new ( Purl ) Personalized URL's to enhance your online marketing that tie's into your Automotive Direct Mail Marketing.